Could Turkey's currency crisis spread "contagion"?

Turkey Could Create A Larger Crisis Than Greece | Daniel Lacalle

Could Turkey's currency crisis spread "contagion"?

Turkey's national airline and its main telecoms firm will halt advertising in US media in response to the crisis in relations between the two allies, company officials said on Tuesday.

Turkish President Recep Tayyip Erdogan vowed that his country would boycott US -made electronic goods, including iPhones. Singling out the iPhone, he suggested Turks buy Samsung Electronics Co. or locally made Venus Vestel smartphones instead.

President Erdogan told political supporters in Ankara that he would start "a boycott against America's electronic goods".

Turkey's President Recep Tayyip Erdogan gestures prior to delivering a speech in Ankara, Turkey, Tuesday, Aug. 14, 2018.

Turkey's lira has lost nearly 40 per cent of its value this year, falling 18 per cent on Friday after President Trump doubled steel and aluminium tariffs and criticised relations between the two countries.

Turkey's state-run news agency and US officials say US National Security adviser John Bolton had met with the Turkish ambassador to Washington on Monday.

Neither the White House, Turkey's Ministry of Foreign Affairs nor Apple immediately responded to a request for comment.

The current crisis was sparked by Ankara's refusal to release pastor Andrew Brunson, who is now under house detention on terror-related charges and espionage.

Jury retires in England cricketer Ben Stokes' nightclub affray trial
Stokes, of Stockton Road, Castle Eden, Durham, and Ali, of Forest Road, Bristol, each denied a charge of affray . Witnesses described seeing a group of men acting like "football hooligans" and dialled 999.

The dispute has centered around the detainment of Pastor Brunson, who is on trial for espionage and terror related charges.

Oil prices jumped after Saudi Arabia said it cut production, adding to concerns about global supply as USA sanctions against Iran bite its exports.

Citizens tend to have bank accounts in various currencies so how they move their money does have a meaningful impact on the lira's trajectory. The country's Finance Minister will seek to reassure around 1,000 worldwide investors in a teleconference scheduled for Thursday.

Although relations between Russian President Vladimir Putin and Turkey's Erdogan have stabilised since they spiralled into crisis when Turkey shot down a Russian fighter jet in 2015, the Kremlin can offer little to ease Turkey's current economic woes.

In addition, Turkey's national airline and its main telecoms firm announced they will halt advertising in the U.S. media.

The lira was around 6.55 to the dollar on Tuesday, up 6% on the previous day after the central bank freed up cash for banks, and a slight recovery from a record low of 7.23 on Sunday.

Although Turkey's currency rose Tuesday, the war of words with the USA that helped trigger the crisis continues. "We will protect our economic independence by being tight-knit together". The currencies of Argentina, Thailand, South Africa, Indonesia, Brazil, Mexico, Poland, Russia and India have come under selling pressure as investors, fearing a form of contagion, have retreated to the perceived safe haven of the U.S. currency. While Turkey's central bank has raised lending rates by 500 basis points this year to 17.75 per cent, it hasn't acted since the latest turmoil began with USA sanctions on the interior and justice ministers on August 1.

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