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Turkish lira crashes to record low as Trump doubles metal tariffs

11 August 2018

The Turkish lira plunged 20% Friday after President Trump announced he would be doubling the import tariff on metal produced in that country, sending Turkey's currency to a record low against the USA dollar.

Trump said he had authorized higher tariffs on imports from Turkey, imposing a 20 percent duty on aluminum and 50 percent one on steel.

Turkey is now under a 25 percent tariff on imported steel and 10 percent on aluminum, which went into effect in March.

Turkish President Recep Tayyip Erdoğan struck a defiant note in a series of Twitter messages shortly before Trump's announcement. U.S. President Donald Trump introduced a round of sanctions on August 1, preventing the Turkish justice an interior ministries from doing business with U.S. businesses.

The president is "not happy with Turkey's decision not to release Pastor [Brunson]", White House press secretary Sarah Sanders said.

The latest tariffs stem from the trade fight Trump launched earlier this year with several countries, including Turkey, according to the Washington Post.

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Axios reported that the Turkey is trying to lessen their dependence on Russian Federation, and the increased sanctions will make their goal more challenging to reach.

A almost hour-long presentation on Turkey's new economic policy by Treasury and Finance Minister Berat Albayrak - Erdogan's son-in-law - also did little to limit the currency's free-fall. "Don't worry", Erdogan told a crowd in the northeastern city of Bayburt.

President Donald Trump's decision to double USA tariffs on steel and aluminum imports from Turkey is "brutal", director of the European Council on Foreign Relations said.

Erdogan called on Turks to not be concerned about exchange rate movements, mockingly declaring "the dollar, the mollar will not cut our path".

Minutes before Ankara learned about the higher tariffs, the lira had already hit an all-time low of 6.87 against the dollar.

The lira has fallen about 40 percent against the dollar this year.

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The lira tumbled 13% in one day, to 6.51 per United States dollar, a massive move for a currency that will make the Turkish poorer and further shake global investors' confidence in the country.

USA sanctions and president Erdogan's tightening control over monetary policy are driving the fall, which sent the lira to an all-time low of above 6 to the dollar this morning.

"I would say we would define progress as Pastor Brunson being brought home", Nauert said.

Without naming countries, Erdogan 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. He is a self described "enemy of interest rates" and wants banks to lend cheap credit to fuel growth, something experts are anxious could seriously affect the economy. The central bank, officially independent, appears to have heeded Erdogan and has not raised rates when many - including the International Monetary Fund - said it should have. "This is a national, domestic battle", he said.

Turkey's new economic perspective was unveiled on Friday by the state's top economic official, Treasury and Finance Minister Berat Albayrak. As the currency drops, Turkish companies and households with debt in foreign currencies see their debts expand.

The Dow Jones Industrial Average had lost more than 270 points by 2:45 p.m. Friday, a 1 percent loss, while falling bank stocks dragged the S&P 500 index down roughly 0.9 percent.

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Turkish lira crashes to record low as Trump doubles metal tariffs