Published: Sat, August 11, 2018
Worldwide | By Gretchen Simon

Why Turkey’s currency is plunging and what it means

Why Turkey’s currency is plunging and what it means

The Turkish lira briefly dropped to a record low on Friday, amid concern over the economic policies of President Recep Tayyip Erdogan, as well as the diplomatic row with the U.S.

USA investors shifted focus from strong corporate earnings to the rout in Europe, sending the major stock-market indexes lower.

Canada's main stock index also fell on Friday. It has lost 40 percent of its value so far in 2018, and reached record lows following Trump's tweet.

The new duties on Turkey are double the level that Trump imposed in March on steel and aluminium imports from a range of countries.

"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", he said.

Turkey accounted for 373 million euros of BBVA's its first half net attributable profit, 14 percent of the group total, suggesting that it may be the most vulnerable to the country's market turmoil.

Meanwhile, investors are anxious about the economic policies of President Recep Tayyip Erdogan, who won a new term in office in June with sweeping new powers.

"As he stated, the president has authorized the preparation of documents to raise tariffs on imports of steel and aluminum from Turkey", White House Deputy Press Secretary Lindsay Walters said.

He also said Turkey had alternatives, "from Iran, to Russian Federation, to China and some European countries".

Samsung Announces $22 Billion Investment In Breakthrough 5G And AI Initiatives
Moon requested Lee to make more investment in Asia's fourth-largest economy that can help fuel employment opportunities. Samsung is making a big push on automotive parts business since the unit was set up in December 2015.

The diplomatic tension and the failure of Turkish officials to persuade the United States to lift the sanctions plunged the lira to new lows this week.

"This will be the response to those who have declared an economic war", blaming Turkey's woes on what he described as an "interest rate lobby" seeking to push the country to higher rates.

Some US officials say Turkey is holding Brunson as a bargaining chip after an executive at Turkey's state-owned Halkbank was convicted and imprisoned in the United States in May for helping Iran evade US sanctions. Companies were "being unfairly punished for participating in global trade", she said.

One economically-illiterate leader is crippling his own economy and blaming everyone else for it, which then turned out to be partially correct when another economically-illiterate leader chose to cripple their economy as payback for what they have done to themselves.

"Normally, Turkey might be able to shrug off this kind of story; however, right now the Turkish economy is already in the terminal stages of a descent into crisis". -Turkish relations is a dispute over an American clergyman who has been jailed in Turkey since December 2016. Gulen denies the allegation. At the beginning of August, the U.S. Treasury Department sanctioned Turkey's ministers of Justice and Interior because of Brunson's detainment.

Turkish President Recep Tayyip Erdogan is appealing for calm as the country's currency plunges, urging people to change foreign money into local lira. That makes a loan in dollars that much more expensive to repay.

New Finance Minister Berat Albayrak - Erdogan's son-in-law - acknowledged that the central bank's independence was critical for the economy, promising stronger budget discipline and a priority on structural reforms.

Some economists were less impressed by the government's handling of the crisis.

Like this: