Turkish lira continues downward spiral, hits new record low

The lira went into free-fall sinking more than 10 percent

The lira went into free-fall sinking more than 10 percent

"As we have seen during the Greek debt crisis, financial markets are sufficiently interwoven that concerns over debt serviceability in one region can spread quite quickly within European banks". Today, however, this does not appear to be on the cards, amid growing divisions between Turkey and the US. It has lost 40 percent of its value so far in 2018, and reached record lows following Trump's tweet.

Amid a steep drop in Turkey's currency, the Lira, the president announced on Twitter Friday that he has given the greenlight to sharply increased tariffs.

"The reason local denominated bonds have been hurt is the potential trade war initiated by the Trump tariffs", explains Maizel, "Most emerging countries live and die from commodities and the fear of lower markets hurts them".

The U.S. media widely pointed to the current state of Turkish-American relations and the case of American pastor Andrew Brunson, who is under house arrest in Turkey over terrorism charges.

Aluminium will now be 20 per cent and Steel 50 per cent.

However, the White House later clarified that Trump's announcement "authorised the preparation of documents" to raise the tariffs.

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

He also urged Trump to recognize the 1915 Turkish slaughter and exile of 1.5 million Armenians as a genocide, which US presidents have declined to do for decades.

The Turkish crisis has set off a wave of selling across emerging market assets, reviving the spectre of contagion that has been the sector's Achilles heel for decades.

As he spoke, the lira fell further - adding to worries about the country's financial stability. 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.

Washington Redskins rookie running back Derrius Guice out for season
ACL tears typically take at least six months to recover from and the track record of being the same player has been mixed. The team said tight end Manasseh Garner, a long shot to make the roster, is out for the season with an ACL injury.

On Friday afternoon Erdogan dug in again, calling for citizens to convert out of dollars and gold and buy the lira to help fight a "national struggle". "This is a national, domestic battle", he told a crowd in the northeastern city of Bayburt.

The Turkish president took aim at the USA in his address, claiming "some countries have engaged in behaviour that protects coup plotters and knows no laws or justice". He said this would be Turkey's response "to those who wage economic war against us". Some 4 million displaced people, most them from Syria, are now living in Turkey.

Then there are Turkey's worsening relations with the US. Gultekin hopes that some sort of compromise between Turkey and the United States can be reached, enabling Erdogan to have an "honourable exit" and come up with a substitute for the International Monetary Fund stabilisation programmes of previous crises.

The ripple effects of Turkey's spiraling currency crisis was felt globally as the Dow Jones Industrial Average and the S&P 500 fell 0.8% and 0.5%, respectively, following Trump's tweet.

Following the tweet, Turkey responded by imposing duties on $1.8 billion in USA goods including coal and paper.

"As he stated, the President has authorized the preparation of documents to raise tariffs on imports of steel and aluminum from Turkey".

"Don't forget, if they have their dollars, we have our people, our God", he said.

Erdogan said that there were "various campaigns being carried out" against the country.

Diplomatic relations between the United States and Turkey have declined since the failed 2016 Turkish coup. Gulen denies the allegation.

Latest News