Erdogan says US ‘wrong’ to threaten Turkey

An investor looks at an electronic board showing stock information at a brokerage house in Shanghai China. Aly Song Reuters  File

An investor looks at an electronic board showing stock information at a brokerage house in Shanghai China. Aly Song Reuters File

The United States is turning its back on Turkey and putting relations between the North Atlantic Treaty Organisation allies in jeopardy, Recep Tayyip Erdogan warned on Saturday after the US President Donald Trump doubled tariffs on Turkish steel and aluminium.

A meeting on Friday unveiling a new economic approach by Turkey's finance minister Berat Albayrak, Erdogan's son-in-law, did little to offer support for the free-falling lira as investors sought concrete steps such as an interest rate increase to restore confidence.

The day saw the lira plunge as much as 18% at one point, the biggest one-day drop since Turkey's 2001 financial crisis.

Investors have become increasingly concerned with the faltering Turkish economy, its central bank's willingness to respond to the downturn and the impact it could have on global financial markets, according to multiple reports.

The penalties also bar any U.S. transactions with the two men.

Turkish lira fell to an all-time low against the dollar yesterday, making it worth about 16 cents.

President Recep Tayyip Erdogan said Washington would pay for challenging Turkey all for the sake of "petty calculations". Financial upheaval risks further destabilising an already volatile region.

"President Erdogan's strengthened powers under the new presidential system have made it increasingly uncertain whether policymakers will be able to act to stabilize the economy", William Jackson, the chief emerging markets economist at Capital Economics in London, said.

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Putting a 50 percent tariff on a foreign country's steel exports isn't the most conventional way to secure an imprisoned American's relief. "Because this is the language they understand", he said.

Turkey wants the U.S. to extradite cleric Fethullah Gulen, a Pennsylvania-based cleric who Turkish authorities say masterminded the coup attempt in which 250 people were killed.

Turkey's currency crisis spilled loudly on to the global stage Friday as other markets, including United States stocks, took at hit from concern about financial contagion to other countries and banks.

This is double the level the president imposed on a range of countries earlier this year, including European Union member states.

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.

Erdogan has further attempted to bolster the nation against this "economic war", calling for citizens to exchange foreign currency and gold for lira as part of the "domestic and national struggle".

Turkey, he wrote, could turn to "other friend and allies", if the United States continued its more hawkish policy vis a vis Ankara, without elaborating who those friends and allies would be. Gulen has denied the allegation. Henri Barkey, a professor of International Relations at Lehigh University, the tariffs "an unnecessary escalation" and advised direct talks between Mr Trump and Mr Erdogan.

Axios reported that the Turkey is trying to lessen their dependence on Russian Federation, and the increased sanctions will make their goal more challenging to reach.

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