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Turkish Lira Tumbles 18% as Trump Doubles Down on Tariffs

EconomyAug 10, 2018 14:48
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© Reuters. Trump doubles steel and aluminum tariffs on Turkey, sending lira to fresh historic low

Investing.com - The Turkish lira extended losses, tumbling nearly 18% to a fresh historic low, on Friday as U.S. President Donald Trump announced that he would double tariffs on steel and aluminum for Ankara.

“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!” Trump proclaimed via his Twitter account, noting that the tariff on aluminum would now be 20% while the levy on steel would rise to 50%.

“Our relations with Turkey are not good at this time!” he emphasized.

At 9:27 AM ET (13:27 GMT), USD/TRY jumped 17.85%, to 6.5404.

Trump has repeatedly lashed out at Turkey over the continued detention of pastor Andrew Brunson, whom Turkish officials accuse of terrorism for his part of the failed 2016 coup, and no progress was made as delegates from both NATO countries met in Washington this week.

Turkish President Tayyip Erdogan brushed off concerns on Thursday, saying it was just a campaign against Turkey.

Earlier on Friday, Erdogan urged Turks to exchange gold and hard currency into lira, framing the crisis as a "national battle" against economic enemies.

"If there is anyone who has dollars or gold under their pillows, they should go exchange it for liras at our banks. This is a national, domestic battle," he told a crowd in the northeastern city of Bayburt. "This will be my people's response to those who have waged an economic war against us."

Worries over Erdogan's influence on monetary policy along with its worsening U.S. relations have pummeled the Turkish currency, which has lost more than a third of its value this year and is down nearly 58% from a year ago.

The selloff has become a more widespread market panic on Friday that dragged down global stocks.

Concerns were particularly poignant due to the exposure of European banks to Turkey, but U.S. equities were also being hit by risk-off sentiment.

Turkish Lira Tumbles 18% as Trump Doubles Down on Tariffs
 

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