Higher US tariffs increase pressure on Turkish economy

Emerging market borrowing costs continue to climb

The currency, which traded 4.7 to the dollar a month ago, has now weakened to 6.4 to the dollar, having lost more than 30% of its value this month, 20% of which accrued in the last 24 hours.

"We are preparing to trade in our local currencies with the countries that we have the largest trade volume such as China, Russia, Iran, and Ukraine".

For his part, the speaker of the Turkish parliament, Binali Yildirim, said Saturday via Twitter that USA sanctions "are now turning into a global economic war".

Analysts say that while Washington's sanctions against Ankara sparked the immediate crisis, Turkey's economy has been risking trouble for a while due to high inflation and the weak lira.

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".

Erdogan also hit back at United States authorities for convicting Mehmet Hakan Atilla, 47, deputy director general of Turkish lender Halkbank on charges of helping Iran evade U.S. sanctions on billions of dollars of oil proceeds. The bond purchases sent interest rates lower, which hurt banks.

Bryan Lynn wrote this story for VOA Learning English, based on reports from Reuters, the Associated Press and Agence France-Presse.

Harsher US tariffs were likely to punish Turkey's already faltering steel exports to the United States. That was its worst loss in a month and ended a five-week winning streak for the index by wiping out its gains from earlier this week.

Erdogan's words did little to reassure investors.

Erdogan said high foreign exchange rates were being used as a weapon against Turkey.

"The country is neither crumbling, nor being destroyed or bankrupt or in a crisis", he said, and added that the way out of the "currency plot" was to boost production and "minimise interest rates".

US President Donald Trump said Friday he had doubled tariffs on steel and aluminum from Turkey, adding to pressure on its troubled economy amid a diplomatic row with Washington over the detention of a pastor.

Economic experts believe the sharp fall of the lira is mainly because of concerns about the government's economic policies. The currency is down about 40 percent so far this year.

The weakening lira has been pushing up the cost of goods for Turkish people and has damaged worldwide investors' confidence in the country.

Earlier Saturday, Erdoğan said that Turkey was preparing to increase trade with its top trade partners like China, Russia, Iran and Ukraine in local currencies instead of the us dollar, adding that it was also ready to do the same with European countries.

European banks fell sharply. "It could serve as a template for further tariff actions against China if the renminbi depreciates further relative to the dollar, even if that depreciation were mainly a reflection of the relative strength of the USA and Chinese economies".

Dryden, of JPMorgan Asset Management, said Erdogan has replaced independent advisers and leaders with relatives and supporters and set off a "gradual process of eroding economic credibility among financial and economic institutions".

Related news:

Hot News

isis-killer-beheading-video-story-top First Trailer For Michael Moore's Anti-Trump Film 'Fahrenheit 11/9'
Aug 12, 2018 - 02:48
The trailer even ends on an image Trump with Moore narrating, "Ladies and gentlemen, the last president of the United States ". At one point, Moore is left speechless when an angry white man pledges to commit violence for seemingly indiscernible reasons.

isis-killer-beheading-video-story-top NCAA announces major rule changes coming to college basketball
Aug 11, 2018 - 01:56
University presidents and chancellors must contractually agree to cooperate with investigations and infractions process. The new rules also allow for heavier punishments, like longer head coach suspensions and stronger fines.

isis-killer-beheading-video-story-top Cam Newton confronted Kelvin Benjamin in a heated pregame chat
Aug 11, 2018 - 01:39
While Newton seemed initially friendly during the meeting, neither man was smiling as Benjamin started to walk away from him. Neither will get the opportunity to hash things out since the two teams do not face each other in the upcoming season.

isis-killer-beheading-video-story-top Liverpool boss Klopp: Big spending always going to happen
Aug 11, 2018 - 01:27
If Matip and Gomez are unavailable, Nathaniel Phillips, who has performed well in pre-season, will likely partner Van Dijk. 'I think for us it was pretty normal there would be one point where we spend more money.

isis-killer-beheading-video-story-top 'Time has come' to create US Space Force, sixth military branch: Pence
Aug 10, 2018 - 00:27
Vice-President Mike Pence speaks during an event on the creation of a United States Space Force at the Pentagon on Thursday. Mattis had previously opposed the creation of a separate military branch focused on space, writing to Rep.

Tesla CEO drops latest bombshell with $72B buyout proposal
Aug 08, 2018 - 00:57
The electric auto maker reported revenue of $4 billion in the second quarter of 2018, with $2.2 billion in cash in hand. Musk has a long history of bristling at the amount of scrutiny Tesla endures from investors and media.

isis-killer-beheading-video-story-top As US prepares sanctions, Iran arrests former forex boss after currency collapse
Aug 07, 2018 - 00:46
He again justified leaving the nuclear agreement (JCPOA) and left the door open to negotiations for new deal in the future. US Secretary of State Mike Pompeo said President Donald Trump's sanctions on Iran would be enforced.

isis-killer-beheading-video-story-top NASA names astronauts for Boeing, SpaceX flights
Aug 05, 2018 - 01:59
NASA named nine astronauts who will be on the first space flights launched from U.S. soil since the shuttle program ended in 2011. The capsules, made by SpaceX and Boeing , will ferry the astronauts and cargo back and forth to the International Space Station.

isis-killer-beheading-video-story-top OH judge orders noisy accused’s mouth to be taped over
Aug 05, 2018 - 01:54
But we can't do it at the same time or yelling over each other. "Does the comment, 'quit talking, ' do you understand that?" "Mr. According to the Daily Mail , Williams spoke over the judge and ignored multiple warnings to remain quiet.

isis-killer-beheading-video-story-top United States wildfires scorching homes, land - and California's annual budget
Aug 05, 2018 - 01:47
The fire has charred an area of the forested, rural area five times the size of San Francisco and is only 30 percent contained. Workers who live in Yosemite's popular Valley region were ordered to leave Friday because of inaccessible roads.

isis-killer-beheading-video-story-top Apple becomes world's first public company worth $1 trillion
Aug 04, 2018 - 02:03
Since the inauguration of the iPhone back in 2007, Apple's shares have risen by 1,100%, jumping a third in the past year alone. The tech company's stock jumped 2.9 percent to end the day at $207.39, giving it a market capitalization of $1.002 trillion.

isis-killer-beheading-video-story-top Manitoba child the province's first human case of West Nile for 2018
Aug 04, 2018 - 01:29
Experts say most people who are infected have no symptoms or experience only mild, flu-like symptoms. The best method to reduce the risk of infections is avoiding mosquito bites.

isis-killer-beheading-video-story-top Judge stops 3-D guns hours before United States release
Aug 03, 2018 - 10:48
Still, Mittow says many 3D printers , even ones that run a couple thousand dollars, would be capable of making plastic guns. District Court Judge Robert Lasnik granted a temporary restraining order against the broadcast of DIY weaponry designs.

isis-killer-beheading-video-story-top Presumed US remains from site of famous Korean War battle
Aug 03, 2018 - 10:45
More than 5,300 U.S. troops are still missing in North Korea. "We couldn't be sure how many individuals were in each box. Still, the initial field forensic review indicated the "remains are what North Korea said they were", Byrd said.

isis-killer-beheading-video-story-top Facebook Removes "Inauthentic" Left-Wing Accounts
Aug 02, 2018 - 01:24
Facebook says the pages ran about 150 ads for $11,000 on Facebook and Instagram, paid for in United States and Canadian dollars. Updated 4:02 pm ET with new information regarding a potential Russian connection to the accounts and pages Facebook removed.