As Turkey crisis mounts, contagion jitters hit global banks

Leroy Wright
August 12, 2018

The United States is turning its back on Turkey and putting relations between the North Atlantic Treaty Organisation allies in jeopardy, Recep Tayyip Erdogan warned on Saturday after the US President Donald Trump doubled tariffs on Turkish steel and aluminium.

Turkish President Recep Tayyip Erdogan won another term in office in June with expanded powers.

"Those who can't compete with us on the ground have brought online fictional currency plots that have nothing to with the realities of our country, production and real economy", Erdogan told a provincial meeting of his AK Party in the Black Sea coastal town of Rize.

In relation to this latter dispute, Turkey's continued detention of American pastor Andrew Brunson, who was jailed 21 months ago in a widespread crackdown over a failed coup in Turkey, has increase hostility between the nations. On Friday, he said the country had to take steps in answer "to those who have waged an economic war against us".

Putting a 50 percent tariff on a foreign country's steel exports isn't the most conventional way to secure an imprisoned American's relief.

Looking at early signs of stress in the banks' dollar bond yields, he concluded: "One possibility is that investors have become concerned that USA sanctions could expand to include the banking sector, adding a premium to the yield on Turkish banks' bonds".

"We have not made concessions on justice so far, and we will never make any".

"Because this is the language they understand".

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.

Turkey says doubled tariffs on Turkish steel and aluminium announced by US President Donald Trump are against the rules of the World Trade Organisation (WTO).

NASA embarks on "dangerous" mission to the Sun
NASA said the mission to "touch the Sun" will provide scientists with vital new information about our solar system and beyond. The probe won't actually land on the sun, but it will make history - getting closer than any other man-made object.

Turkish officials held talks in Washington this week but there was no breakthrough.

Addressing for the first time on Friday to a rally of his supporters, he said, "If they have dollars, we have our people, we have our right and we have Allah!"

Shares in France's BNP Paribas, Italy's UniCredit and Spain's BBVA, the banks seen as most exposed to Turkey, fell 4 per cent or more.

"We are gearing up for trade in national currencies with China, Russia, Iran, Ukraine, which account for the largest bilateral trade volume".

In an op-ed published in New York Times, Erdogan warned Washington not to risk its relations with Ankara, saying otherwise it would look for "new friends and allies".

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 USA -based Muslim cleric, were attacking Turkey in new ways since his re-election two months ago.

It has lost 40 percent of its value so far in 2018, and reached record lows following Trump's tweet.

On Friday Turkey made it clear Erdogan had spoken on the phone with Russian President Vladimir Putin after the latest U.S. tariffs, with the two men "expressing pleasure" that relations were progressing "positively".

I hope we can soon get Pastor Brunson and other Americans released in a win-win fashion for both the U.S. and Turkey."Trump's move to double tariffs on Turkey was even praised by one of the president's most frequent Democratic critics".

Turkey entered a full-blown financial meltdown on Friday, after President Recep Tayyip Erdogan declared his refusal to bow to USA political demands and market pressures.

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER