Erdogan, Trump talk takes Turkish lira to new low

Istanbul, Aug. 10: The Turkish lira continued its downward slide on Friday, hitting a fresh record low, after US President Donald Trump authorised the doubling of metals tariffs on Turkey.

The lira traded down 15 per cent against the US dollar at 6.38 after Trump made the comment in a tweet. The currency also traded down 20 per cent earlier in the day, reaching a record low.

The White House later said in a statement: "As he stated, the President has authorized the preparation of documents to raise tariffs on imports of steel and aluminum from Turkey. Section 232 tariffs are imposed on imports from particular countries whose exports threaten to impair national security as defined in Section 232, independent of negotiations on trade or any other matter."

Trump’s tweet and the White House comment came after Turkish President Recep Tayyip Erdogan asked citizens to convert their dollars and other foreign currencies as well as gold holdings to local lira. “Change the euros, the dollars and the gold that you are keeping beneath your pillows into lira at our banks. This is a domestic and national struggle," Erdogan said, according to an AP translation. Erdogan said Turkey was facing an "economic war" and noted the country would respond to those countries who had started it. “We are facing economic attacks today, and we need to defend our country,” Erdogan said, according to a translation. "The economic attack against us now is the same as the coup attempt against us. I'm urging our country to increase outputs, to increase exports."

Turkish stocks also fell on Friday as the iShares MSCI Turkey ETF dropped 14.9 percent. The ETF was already down 42.3 percent this year prior to Friday’s losses.

The sharp drop in Turkish assets came after a delegation returned from Washington with no apparent progress on the detention of U. S. pastor Andrew Brunson, who is charged with supporting a group blamed for an attempted coup in 2016.