Turkey's lira crisis: How bad can it get?

Erdogan to Trump: Shame on You, Shame on You

Turkey has also been hit by United States sanctions on Iran, given that half of Turkey's oil imports come from Iran.

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.

"The country is neither crumbling, nor being destroyed or bankrupt or in a crisis", he said, and added that the way out of the "currency plot" was to boost production and "minimise interest rates".

Erdogan has cast the sell-off in the currency that has followed the trade row as an economic war and an attempt to undermine Turkey's economy.

During a speech in the Black Seas city of Rize overnight, President Recep Tayyip Erdogan called on citizens to exchange hard currencies and gold for the lira.

Erdogan's "tight grip" on the central bank and the fact "higher interest rates do no fit with Turkey's economic growth strategy" meant that the central bank has kept interest rates on hold, Nora Neuteboom, economist at ABN Amro, told AFP.

The Washington Post newspaper said the US administration was doing everything to strengthen its hand in the Brunson case, but the decision would do nothing but cause more problems for bilateral relations.

In a tit-for-tat response to the U.S. sanctions, Erdogan responded by announcing that the assets in Turkey of the USA secretaries of "justice and interior" would be frozen.

Mr Erdogan appealed for calm and renewed a call on people to change foreign money into local lira.

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Turks have over the last half decade counted the rapid depreciation of the Turkish lira on the screens outside doviz (exchange) booths with a mixture of bewilderment, alarm and ironic amusement.

He added: "If there are dollars under your pillow, take these out".

Relations are also tense because of new U.S.

These tensions and tariffs indicate a deterioration of the U.S.

The single currency had retreated 0.7 percent overnight, its decline accelerating after the European Central Bank said that risks to global growth are increasing as the risk of protectionism and the threat of higher USA tariffs sap confidence.

Washington "must give up the misguided notion that our relationship can be asymmetrical", he said in the opinion piece.

Iranian Foreign Minister Javad Zarif said: "Trump's jubilation in inflicting economic hardship on its North Atlantic Treaty Organisation ally Turkey is shameful".

But Israel released that woman last month, and pastor Andrew Brunson of North Carolina remains in a Turkish prison. It is host to a critical part of the Western alliance's missile defence system against Iran. "This is a national, domestic battle", he said.

"Section 232 tariffs are imposed on imports from particular countries whose exports threaten to impair national security as defined in Section 232, independent of negotiations on trade or any other matter", White House deputy press secretary Lindsay Walters said in a statement.

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