Erdogan vows to defy USA 'threats' after currency crash

An investor looks at an electronic board showing stock information at a brokerage house in Shanghai China. Aly Song Reuters  File

An investor looks at an electronic board showing stock information at a brokerage house in Shanghai China. Aly Song Reuters File

U.S. President Donald Trump intensified his spat with Turkey on Friday by imposing higher tariffs on metal imports, putting unprecedented economic pressure on a North Atlantic Treaty Organisation ally and deepening turmoil in Turkish financial markets.

A plunge in the Turkish lira rocked global equities and emerging markets on Friday and fear of more turmoil sent investors scurrying for safety in assets like the yen and USA government bonds.

Fears over contagion even pushed global equity markets lower, with some European banks coming under heavy selling pressure due to their exposure to Turkey.

This great upheaval is also thought to have been caused by the downward turn in U.S.

Announcing that aluminium tariffs will rise to 20 per cent and steel tariffs to 50 per cent, Trump said on Twitter that U.S. relations with Turkey "are not good at this time", and seemed to gloat at the country's misfortunes.

Erdogan has cast the recent slide in the lira as a war and without naming countries said supporters of a failed military coup two years ago, which Ankara says was organized by a US -based Muslim cleric, were attacking Turkey in new ways since his re-election two months ago.

"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.

"In that sense, the Turkey situation can be a contagion not only in Europe but across emerging markets", Anderson said.

Erdogan said Turkey acted in accordance with the law, saying: "We have not made concessions on justice so far, and we will never make any".

At 8.47 a.m. Eastern time - 3:47 p.m.in Turkey - Trump had turned to Twitter to announce that he would be doubling steel and aluminum sanctions on Turkey.

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"If they have their dollar, we have the people, we have Allah", he said, appealing to his religious Muslim base.

"Those who challenge a country like Turkey for the sake of petty calculations will pay a price both in our region and in their own politics", the Turkish leader said.

A financial shockwave ripped through Turkey on Friday when its currency nosedived over concerns about the country's economic policies and a deepening row with the US.

The lira crashed days ago as tensions between the U.S. and Turkey began to rise.

"If there is anyone who has dollars or gold under their pillows, they should go exchange it for liras at our banks".

Despite Trump's insistence, Turkey has not budged in freeing American pastor Andrew Brunson, who has been detained by Turkey for nearly two years on charges that he was working with a terrorist organization and was a spy.

Turkey's currency slumped to a new record low as Donald Trump compounded the country's economic crisis by doubling steel and aluminium tariffs.

"Turkey's greatest value to the U.S.is not economic but strategic", Singh continued. Gulen has denied the allegation.

Shares of Turkish steelmakers Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS and Eregli Demir ve Celik Fabrikalari TAS plunged as much as 8 per cent and 9.9 per cent, respectively, after Trump's tweet. He offered no further details.

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