Lira extends slide as Turkey heads toward a financial crisis

39;US sanctions instigate economic war'

His assurance came after Turkey's president blamed the lira's plunge on a plot against the country.

The lira plunged to a fresh record low of 7.24 against the dollar during in Asia Pacific trade, where markets were opening for Monday morning.

Experts have blamed the sharp slide in the lira on fears the country is descending into an economic crisis.

LMoreover, El-Diwany said that the Turkish market gets an advantage in the exportation markets, which both Egypt and Turkey export the same products for, explaining, "Egypt can not well compete with Turkey in exporting textiles to the same markets, as the Lira is now down, hence prices will be lower than before".

Last week, Goldman Sachs said in a research note that a depreciation of the lira to 7.1 to the dollar would erode Turkish banks' excess capital. Trump said on Twitter.

"The decline in the lira is multifaceted, caused not only by a weak external position in terms of current account deficit and inadequate currency reserves but also the challenging political environment which exacerbates the vulnerabilities in the lira", said Kerry Craig, global market strategist at JP Morgan Asset Management.

Presidential Communications Director Fahrettin Altun described the rumors as "disinformation campaign" based on a statement by President Recep Tayyip Erdoğan, who had said on August 12 that "You must know that keeping this nation on its feet is not just our duty but also the duty of industrialists and merchants". Inflation has ravaged Turkey. "To work, it will have to be large and would have to be accompanied by a "whatever it takes" statement".

"It's like dumping gasoline on a fire", Win Thin, a strategist at Brown Brothers Harriman in NY, told Bloomberg on Sunday. "Policy making is too top-heavy and run by Erdogan, and he simply has no idea how markets work".

He said the crash of the lira, sparked by his bitter dispute with the U.S., was a "political plot" against Turkey and warned that Ankara would now seek new markets and partners, AFP reported. Some analysts speculate the early vote was a tactical move to act before economic imbalances became manifest.

Erdogan had on Friday held a phone call with Russian President Vladimir Putin to discuss economic and trade issues as well as the Syria crisis. With that kind of power vacuum, everyone simply defers to the leader.

Heightened global tensions didn't do much to support gold prices, which were trading at $US1209.39 an ounce, down $2.31, as strength in the USA dollar outweighed the precious metal's safe-haven appeal to investors. But they also know they need all of those things at the same time, and there's only one person who could coordinate and approve such action.

The United States gave Turkey a deadline to release an American pastor being tried by a Turkish court or face sanctions, President Tayyip Erdogan said on Sunday as he threatened once again to seek out new allies.

Erdogan had on Saturday described interest rates as a "tool of exploitation", in remarks unlikely to impress the markets.

Contagion is also fueled by concern that fund managers who have lost heavily in Turkey or other emerging assets will look to sell more liquid parts of those portfolios to meet expected redemptions.

"It was clear Turkey would not be governable this way and it is not", said Gurkaynak, the professor in Ankara.

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