Lira extends retreat as Turkey heads toward a financial crisis

13 August, 2018, 08:42 | Author: Myra Gill
  • The Turkish government has promised to announce a “new economic model” today amid fears that the International Monetary Fund would have to be called

U.S. President Donald Trump introduced a round of sanctions on August 1, preventing the Turkish justice an interior ministries from doing business with U.S. businesses.

Turkey wanted issues to be solved through diplomacy, dialogue and good intentions, Aksoy said.

Turkey has pledged it will take action to calm markets after the lira plunged to a new record low in Asian trading.

Turkey has drafted an action plan and its institutions will start taking necessary steps on Monday morning to ease financial markets' concerns, Finance Minister Berat Albayrak said, after the lira plunged last week.

"With God's permission we will overcome this", Erdogan told his party members in the Black Sea city of Trabzon.

Despite the tumult, President Tayyip Erdogan remains in combative mood, calling the rout a "political, underhand plot" against Turkey.

Turkey's detention of Andrew Brunson on security-related charges is one of a series of disputes at the heart of deteriorating ties between the two countries.

President Tayyip Erdogan told Turks on Friday to sell their gold and US dollars to support the country's currency which plunged after US President Donald Trump escalated a feud with North Atlantic Treaty Organisation ally Turkey by doubling tariffs on metals imports.

Despite his country's currency falling significantly, the Turkish President is adamant Turkey is not on the brink of an economic crisis, calling on citizens to exchange United States dollars and Euros for the Turkish lira.


Erdogan noted that his country would turn to other partners if this "economic war" goes on.

Erdogan appeared unworried by the punitive measures imposed by the United States, saying Turkey could turn to other partners and again terming the crisis an "economic war".

Turkey and the US are now experiencing rocky relations following Washington's imposition of sanctions on Interior Minister Suleyman Soylu and Justice Minister Abdulhamit Gul for not releasing American Pastor Andrew Brunson, who faces terrorism charges in Turkey.

Erdogan made the claim in a statement Sunday, saying Turkey could face additional US sanctions for refusing to comply with the request.

Without naming countries, Erdogan said supporters of a failed military coup two years ago, which Ankara says was organised by a US-based Muslim cleric, were attacking Turkey in new ways since his re-election two months ago.

The central bank has over the last weeks defied calls from markets for rate hikes to combat these problems, raising fears of interference from Erdogan who has repeatedly called for low interest rates.

The lira lost about 40 percent of its value against the U.S. dollar this year and, to reduce its volatility, Ankara has prepared an urgent action plan.

The announcement accelerated the sell-off of Turkey's lira currency, already battered by worries about President Tayyip Erdogan's influence over the central bank.

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