Turkish Economic Crisis Deepens As Currency Hits All-Time Low

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President Tayyip Erdogan told Turks to exchange gold and dollars into lira as the currency tumbled after President Donald Trump doubled US tariffs on metals imports from Turkey.

The lira tumbled about 10 per cent on Friday to another record low as investors worry about Erdogan's unorthodox economic policies and U.S. sanctions.

In what appeared to be a diplomatic slight, Turkey announced soon after Trump's tweet that Erdogan had held a phone call with Russian President Vladimir Putin about "strengthening economic and trade ties". "Hopefully we will overcome this disaster and we will also successfully overcome this economic war", Erdogan said. The lira has fallen about 40 percent against the dollar this year.

Trump tweeted that he had authorized the doubling of steel and aluminum tariffs "with respect to Turkey".

The new duties on Turkey are double the level Mr Trump imposed in March on steel and aluminium imports from a range of countries.

A key reason behind Turkey's plummeting currency is its worsening relations with the White House.

An important emerging market, Turkey borders Iran, Iraq and Syria and has been mostly pro-Western for decades. Financial upheaval there risks further destabilising an already volatile region.

Unilateral steps taken by the USA only harm its interests and security, Turkish President Recep Tayyip Erdogan said on Friday in an article he wrote for The New York Times.

Turkey's economy is regarded as fragile because of its high debt, which the global Monetary Fund estimates is 50 percent of its gross domestic product.

Mr Erdogan said the United States had "repeatedly and consistently failed to understand and respect the Turkish people's concerns".

"If you have dollars, euros or gold under your pillow, go to banks to exchange them for Turkish lira".

Turkey remains at loggerheads with the USA in one of the worst spats between two North Atlantic Treaty Organisation allies in years over the detention of American pastor Andrew Brunson and a host of other issues. Companies were "being unfairly punished for participating in worldwide trade", she said. He added that the country will continue to enjoy good economic relations with several major nations.

Erdogan has blamed outside forces for trying to bring down Turkey's economy.

"When it comes to cornering Turkey to extract certain concessions that undermine our sovereign rights, it is a whole another story".

Ankara wants the United States to extradite Fethullah Gulen, a Pennsylvania-based cleric who Turkish authorities say masterminded the 2016 coup attempt in which 250 people were killed.

The lira's plummeting value, the potential for debt defaults, the possibility of a balance-of-payments crisis and rising inflation all represent clouds gathering ahead of an economic storm that could batter the country.

The arrest of United States pastor Brunson since October 2016 has soured already delicate relations with Washington.

Turkey's sovereign dollar-denominated bonds tumbled with many issues trading at record lows.

Treasury and Finance Minister Berat Albayrak - who is Erdogan's son-in-law - was scheduled later on Friday to outline a 'new economic model'.

Turkish President Recep Tayyip Erdogan is appealing for calm as the country's currency plunges, urging people to change foreign money into local lira.

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