"""
"""
Turkey was thrust into a full-blown currency crisis on Friday, as a defiant President Recep Tayyip Erdogan warned of an “economic war” against the country and Donald Trump imposed even higher tariffs on its steel and aluminium exports to the US.

lira tumbled 14.3 per cent against the dollar to TL6.47 from the previous New York close. The currency — which has lost more than 40 per cent of its value this year — was 18.5 per cent lower at one point on Friday.

The lira’s collapse rippled across other emerging markets, sending the South African rand, Argentine peso and Russian rouble lower by between 1.5 per cent and 3.5 per cent. Investors retreated from riskier assets, while European banks with exposure to Turkey suffered sharp share price falls.

After weeks of mounting concern about Turkey’s economic and political leadership, investors took flight as Mr Erdogan gave scant detail about how he would shore up the currency, and as Mr Trump exacerbated a damaging split between the two longstanding Nato allies.

Turkey faces its most serious financial crisis since Mr Erdogan took office 15 years ago. In the past, Washington has helped Ankara regain financial stability but the two nations are at loggerheads over issues including Turkey’s detention of an American pastor.

Wilbur Ross, US commerce secretary, on Friday evening said the US would double the tariff on imports of Turkish steel to 50 per cent, because the previous level of 25 per cent had not been enough to sufficiently reduce Turkish exports to the US.
[...]
The EU has signalled its growing concern over the crisis. An International Monetary Fund official said the EU council had asked the fund for a meeting last month because officials were worried about the pressures in Turkey and the potential impact on a deal with Ankara to stem migration to the EU.

Mr Erdogan, who has rejected the idea of making any appeal to the IMF, vowed to fight an “economic war”. But a plan to “rebalance” an overheating economy presented by finance minister Berat Albayrak failed to convince investors.

Mr Trump raised the pressure with an announcement on Twitter:
"I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!"
[...]
Mr Trump’s comments underlined the extent to which the White House has embraced the use of sanctions as a foreign policy tool. In 2017, Turkey sold 1.5m tonnes of steel to the US, its largest export market
[...]
Its plunge on Friday hit Turkey’s bond and equity markets, pushing the yield on the local currency 10-year bond up to 20.8 per cent and the benchmark BIST 100 index of leading Turkish stocks down 3.7 per cent, although it later mostly recovered.

Mr Erdogan urged Turks to defend their currency. “If there is anyone who has dollars, euros or gold under the pillow, he should go and convert this at the bank,” he said.

He also spoke to Russian President Vladimir Putin to discuss economic and commercial ties.
[...]
Charles Robertson, chief economist for EM-focused Renaissance Capital, said markets had “lost confidence in the triumvirate of President Erdogan, his son-in-law as finance minister and the [central bank’s] ability to act”.

The lira’s fall came amid increased concerns from the eurozone’s chief financial watchdog over the exposure of some of the single currency area’s biggest lenders to Turkey — chiefly BBVA, UniCredit and BNP Paribas.

In Washington this week, Turkey failed to convince the Trump administration to lift sanctions against its interior and justice ministers — a move the US imposed in response to the detention of Andrew Brunson, a pastor from North Carolina.

Experts said it was highly unusual for a US president to use sanctions to pressure a country to release one of its citizens from detention. But some analysts point out that the fact that Turkey, a Nato ally, was detaining American citizens was an exceptional case.
"""
https://www.ft.com/content/f50594a8-9c96-11e8-ab77-f854c65a4465
https://www.ft.com/content/f50594a8-9c96-11e8-ab77-f854c65a4465

Labels: Oleg Zabluda

- posted by Oleg Zabluda @ 10:36 AM | permalink | | | technorati | bloglines | feedster