Turkey's Erdogan calls on Turks to buy lira for 'national battle'

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Thus, Trump's tweet suggests that any country that enters a time of economic turmoil - and consequently, sees the value of its currency fall - is a fair target for punitive trade actions by the United States.

The Turkish lira hit an all-time low against the dollar on Friday, and there are growing concerns that the country's economic troubles could spread to the eurozone.

Following a few uneventful days of summer trading, Turkey's lira tumbled 14% on Friday, as a standoff over an imprisoned US pastor led to President Donald Trump doubling tariffs on that nation's steel and aluminum exports.

"This innocent man of faith should be released immediately", Trump previously wrote on Twitter when it became clear Turkey would not release the evangelist, who was ordered to be held under house arrest.

He declared: "Our relations with Turkey are not good at this time!".

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

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

Erdogan had raised eyebrows Thursday when he appeared to invoke divine intervention, saying: "If they have dollars, we have our people, we have our right and we have Allah!"

Turkey's trade ministry said the tariffs were against World Trade Organisation rules.

Donald Trump's administration hit its justice and interior ministers with sanctions last week, a reaction to the detention of American pastor Andrew Brunson, who has has been held for almost two years over alleged links to political groups.

But in Turkey, Mr Erdogan has made sure he controls the reins.

Earlier this week US and Turkish officials met in Washington to discuss issues that have pitted the two North Atlantic Treaty Organisation allies against each other. He is facing up to 35 years in prison if found guilty of supporting the unsuccessful coup to overthrow President Recep Tayyip Erdogan in 2016. The president, who says a shadowy "interest rate lobby" and Western credit ratings agencies are attempting to bring down Turkey's economy, appealed to his countrymen's patriotism.

Turkish President Recep Tayyip Erdogan said Turks should not be alarmed by exchange rate movements.

"This is a domestic and national struggle", Erdoğan said, according to The Associated Press.

Turkey, home to the Incirlik air base which is used by USA forces in the Middle East, has been a North Atlantic Treaty Organisation member since the 1950s.

Deteriorating ties between the US and Turkey - both North Atlantic Treaty Organisation members - have also alarmed investors.

The lira's decline caps a week of political news that's unnerved investors, as the USA ramped up sanctions on Turkey and Russian Federation and as the United Kingdom fretted over a so-called no-deal Brexit. Gulen denies the allegation. Graham called Turkey's case against Brunson a "sham".

The White House followed through on that threat on August 1 and sanctioned two top Turkish officials linked to Brunson's ordeal.

Halkbank has said that all of its transactions were lawful.

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

"First of all, confidence needs to be regained".

The Lira touched a historic low versus the U.S dollar.

In the City, fund managers and investment commentators warned of the risk of capital flight from the country and flagged up the risk to European banking stocks - such as Spanish lender BBVA and Italian group UniCredit - from their exposures to Turkish lending.

The latest escalation came as Turkey's Economy Minister Berat Albayrak, who is Erdogan's son-in-law and a trusted lieutenant, unveiled what was touted as a new economic plan, pledging Central Bank independence, tighter budget discipline and sustainable and healthy growth.

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