Published: Tue, August 14, 2018
Money | By Hannah Jacobs

Turkey's Erdogan Vows Action Against 'Economic Terrorists' Over Lira Plunge

Turkey's Erdogan Vows Action Against 'Economic Terrorists' Over Lira Plunge

Turkish President Recep Tayyip Erdogan says his country will boycott USA -made electronic goods amid a diplomatic spat that has helped trigger a Turkish currency crisis.

Foreign Minister Mevlut Cavusoglu said Monday that the United States would not achieve aims by exerting pressure and imposing sanctions on Turkey. The Capital Markets Board of Turkey issued a similar warning to those who spread "lies, false or misleading information, news or analysis".

"If (the United States) have the iPhone, there's Samsung on the other side", he said, referring to USA giant Apple's iconic phone and the top South Korean brand.

Share prices in Turkish electronics manufacturer Vestel rose sharply on Erdogan's comments.

Erdogan has been repeatedly photographed with Apple products including the iPhone and iPad.

At the weekend Trump said he had authorised the doubling of tariffs on Turkish steel and aluminium to 50 per cent and 20 per cent respectively.

"We will stand against the dollar, currency rates, inflation, interest rates. Necessary instructions on the issue have been issued to our agencies", Yahya Ustun, spokesman for the country's flag-carrier, wrote on Twitter. Chief Executive Elon Musk said he was in discussion with Saudi Arabia's sovereign wealth fund and other potential backers of his plan to take the electric carmaker private, but he said financing was not yet nailed down. "What do you want to do?" Also, the the biggest stakeholder in the International Monetary Fund, making it even harder for Erdogan to accept the help of a country he has branded as the enemy.

Turkey's situation is among the most precarious among emerging markets because so much of its growth was fueled with debt in foreign currencies.

The currency tumbled to a record low of around 7.20 lira against the dollar late on Sunday after Erdogan warned of drastic measures if businesses withdraw foreign currency from banks.

The lira has lost about a fifth of its value against the greenback since Friday.

The Turkish currency has stabilized near record lows as investors gauge the government's next move to avoid a full-blown financial crisis. But world stock traders were dismayed the bank did not raise interest rates, which is what many economists believe is necessary to ease the crisis. He said it had readied an "action plan", without elaborating.

Angered by the continued detention of an American pastor, the USA has imposed new sanctions on Turkey which Foreign Minister Heiko Maas told reporters Monday has increased political tensions. Meanwhile, Turkey's state-run media said the lawyer representing the pastor appealed to a court to lift a travel ban imposed on Brunson. Brunson has vehemently denied the charge, claiming that as an Evangelical Christian, he has never had any desire to join an Islamic or Marxist atheist association.

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