Turkey lira crashes as Trump piles on pressure

One US dollar bought 5.57 lira during evening trading yesterday

One US dollar bought 5.57 lira during evening trading yesterday

"As he stated, the President has authorized the preparation of documents to raise tariffs on imports of steel and aluminum from Turkey", said White House spokesperson Lindsay Walters.

U.S. President Donald Trump said on Friday he had authorised higher tariffs on imports from Turkey, imposing a 20 percent duty on aluminium and 50 percent one on steel, as tensions rose between the two North Atlantic Treaty Organisation allies over Ankara's detention of an evangelical pastor and other diplomatic issues.

But the trade minister, Ruhsar Pekcan, said: "We implore President Trump to return to the negotiating table".

BBVA, which reported a lowly CET 1 ratio of 10.8 percent at the end of the first half, also said a 10 percent slump in the lira would shave 2 basis points off its core capital.

The United States is the biggest destination for Turkish steel exports.

Turkish President Recep Tayyip Erdogan spoke before the nation twice on August 10, but the country's currency continued its descent, reaching about 6.4 lire per dollar, a decline of about 14.6 percent.

Last week, he called on Turks to convert their foreign currency and gold into Turkish lira to help the currency.

The US president revealed the action on Friday as he noted how the Turkish lira "slides rapidly downward" against the "very strong" US dollar. Trump also threatened additional "large sanctions" against Turkey, a North Atlantic Treaty Organisation ally, for Brunson's detention. The lira fell further as Erdogan spoke. For China, stabilizing a fellow emerging economy's currency has value, but Beijing could also benefit from becoming an economic friend to a North Atlantic Treaty Organisation state whose relationship with the West is increasingly strained.

Hoping to put pressure on the North Atlantic Treaty Organisation ally to free the pastor, the White House sanctioned two top Turkish government officials. USA stock markets also fell after his tweet.

Mnangagwa's Sunday inauguration called off
The president-elect who is to be sworn into office this weekend and his party, Zanu-PF, have welcomed the court action. MDC leader Nelson Chamisa says he has evidence to show that he was cheated out of the 30 July presidential vote.


"In that sense, the Turkey situation can be a contagion not only in Europe but across emerging markets", Anderson said.

The timing of Mr Trump's tweet coincided with an announcement by Turkey's Treasury and Finance Minister Berat Albayrak of the government's new economic policy which is aimed at restoring confidence in the lira.

The United States placed sanctions on two Turkish officials earlier this month because of Brunson's case. The Eurozone is particularly exposed - the European Central Bank is anxious about non-hedged exposure of European banks to Turkish companies and if Turkish banks fail, there's no question that it will affect markets around the world.

But President Erdogan brushed off any concerns during a speech in the northeastern city of Bayburt on Friday, saying: 'The dollar can not block our path.

Presenting the government's new economic model, Albayrak said the next steps of rebalancing would entail lowering the current account deficit and improving trust. "Don't worry", Erdogan told a crowd in the northeastern city of Bayburt.

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

The news comes as tensions between the United States and Turkey continue to grow over the North Atlantic Treaty Organisation ally's continued detainment of Pastor Andrew Brunson. Turkey answered the March tariff announcement by placing its own tariffs on $267 million of USA goods. Hard currency debt issued by Turkish banks suffered similar falls.

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

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