Turkish Central Bank Takes Steps To Curb Currency Crisis

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US President Donald Trump on Friday ramped up his attack on Turkey by doubling US tariffs on Turkish aluminum and steel imports to 20 percent and 50 percent, respectively.

Much of the early action was in currencies with the euro gapping lower as the Turkish lira took another slide to all-time lows around 7.2400 at one stage.

It's been a rough few days in the world's emerging markets, led by a currency crisis in Turkey.

Investors globally headed for safe harbors including the us dollar as the selloff in Turkey spread to emerging markets overseas, including South Africa's rand.

The lira is now down around 45% against the dollar since the start of the year, making it far harder for Turkish companies to pay back loans they have taken out in the United States currency.

They would be in addition to the tariffs of 25 per cent on steel and 10 per cent on aluminum that the USA imposed in March for imports from a variety of countries. Our relations with Turkey are not good at this time!'

The biggest moves were in emerging markets. Financial upheaval risks further destabilizing an already volatile region.

"President Erdogan of Turkey is showing no sign of backing down against the United States", said market analyst David Madden at CMC Markets UK, adding the crisis risked having a "knock-on effect" around Europe.

"Erdogan's aim is to improve the economic position of households", she said, adding the government wanted to "keep the music playing" even as external and internal imbalances grow. While some are anxious that making an enemy out of Turkey will only result in grave consequences, others seem to have no qualms about walking away from America's alliance with the nation.

Recep Tayyip Erdogan
The Turkish president has struck a defiant tone

America has also been irritated by Turkey's decision to buy a Russian missile defence system earlier this year, while Ankara has hit out at Washington's backing of Kurdish rebels in Syria. He denies the charges.

A Turkish delegation visited Washington for talks this week but left with no signs of a breakthrough. "This is Turkey", he said. The central bank has launched measures to ensure financial stability and allay concerns in markets rattled by an abrupt plunge in the national currency value.

"Before it is too late, Washington must give up the misguided notion that our relationship can be asymmetrical and come to terms with the fact that Turkey has alternatives".

With investors already on edge over the China-US trade war, the lira's collapse sparked a sell-off in Europe and NY at the end of last week, with safe haven assets including the Japanese yen and Swiss franc rallying.

He alluded to multifaceted rows, including United States sanctions and Turkey's estrangement within North Atlantic Treaty Organisation. He also ruled out an agreement with the International Monetary Fund, saying those calling for it were really calling for the nation to relinquish its political independence.

Mr Cavusoglu said: "We support diplomacy and negotiations but it is not possible for us to accept impositions". Gulen denies the allegation.

He's trial in Turkey for allegedly belonging to a terrorist group.

His cause resonates with Trump's Christian conservative supporters, who could be influential as Republicans seek to retain control of Congress in midterm elections in November.

On Sunday, Erdogan revealed details of talks between the two countries over the pastor, saying the U.S. had given Turkey until last Wednesday to hand him over. He offered no further details.