Turkish lira tumbles to fresh low

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President Tayyip Erdogan told Turks on Friday to exchange their gold and dollars into lira, with the currency in free fall as President Donald Trump escalated a feud with Ankara by doubling tariffs on metals imports.

The lira has always been falling on worries about Mr Erdogan's influence over monetary policy and worsening relations with the United States.

The lira extended its losses to trade at 6.2 to the dollar, a loss of 11.5 percent on Friday. The currency is down about 40 percent so far this year.

Compounding the lira's agony, President Donald Trump said yesterday he had doubled steel and aluminium tariffs on Turkey, noting that relations between the North Atlantic Treaty Organisation allies were "not very good".

Mr Trump said tariffs on aluminium imports would be increased to 20% and the tariff on steel imports will be raised to 50% as the Turkish Lira "slides rapidly downward against our very strong Dollar!". But this seems less likely as Erdogan and his mouthpieces in the media cast the United States' moves as some kind of epic battle to wreck Turkey, and Trump just gave them fresh ammunition.

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"In that sense, the Turkey situation can be a contagion not only in Europe but across emerging markets", Anderson said. Financial upheaval risks further destabilizing an already volatile region. The U.S. exported $9.75 billion worth of goods-mostly cotton, scrap iron, steel, civilian aircraft parts, coal, and petroleum gases-to Turkey, and imported $9.42 billion worth of goods from them.

However, the White House later clarified that Trump's announcement "authorized the preparation of documents" to raise the tariffs.

The latest tariffs stem from the trade fight Trump launched earlier this year with several countries, including Turkey, according to the Washington Post.

Trump last month threatened to slap "large sanctions" on Turkey if it did not release American pastor Andrew Brunson, who faces charges of espionage for allegedly supporting a failed coup attempt in 2016.

Ankara sent a delegation this week to Washington to meet with both the State and Treasury Departments to resolve some of the disputes but those talks showed no signs of breakthrough. If it fell much further, it might push a lot of Turkish banks and businesses that had borrowed in dollars into bankruptcy - assuming they did not get bailed out first.

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"Some countries have engaged in behaviour that protects coup plotters and knows no laws or justice", he said.

Turkey's woes have been aggravated by investor worries about the economic policies of Erdogan, who won a new term in office in June with sweeping new powers.

"In this process, we will finely work every single detail as a wide spectrum including all national and global stakeholders", he said in the first part of his speech, referring to Turkey's Medium-Term Economic Plan (OVP), which will soon be renamed.

Turkey was facing artificial financial volatility, Erdogan said, and people should not pay close attention to foreign exchange prices, and should instead focus on the "big picture". High level meetings in Washington between USA and Turkish officials ended this week without an apparent resolution. "Today I am instructing my friends that we will freeze the assets of United States secretaries of justice and interior in Turkey", he said last week. Gulen has denied the allegation.

His cause resonates with Trump's Christian conservative supporters, who could be influential as Republicans seek to retain control of Congress in midterm elections in November.

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It's an awkward triangle, given that Turkey is a Nato member, Russian Federation is Nato's number one threat and the organisation is obliged to defend any member that is attacked.

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