Turkey is a 'target of economic war', Erdogan says

Berat Albayrak

"Threats, sanctions and bullying against Turkey will not work", he said. United States stocks were also rattled.

He also repeated his call to Turks to sell their dollar and euro savings to shore up the lira.

A slew of unnerving headlines this week from the United Kingdom, Russia, and Turkey has culminated in a wild Friday for global markets.

"If they have the dollar, we have Allah", he said.

Washington in response sanctioned two Turkish ministers and Trump on Friday announced it was doubling the tariffs on steel and aluminium imports from Turkey, saying relations with Ankara were "not good at this time". European and American bank stocks declined on concerns about their exposure to Turkey.

These fears spilled over into United States markets, with investors shifting their focus away from strong corporate earnings to what was happening across the Atlantic.

In contrast, the pound has slumped 1.4 percent this week amid increasing speculation Britain will leave the European Union without an agreement regarding its future relationship with Brussels. 'On some days, I end the day with a loss'.

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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.

Turkey has arrested an American pastor and put him on trial for espionage and terror-related charges linked to a failed coup attempt in the country two years ago. Erdogan appealed to a crowd in the city of Bayburt to exchange dollars and gold for Turkish lira to prop up the plunging currency.

Speaking after U.S. President Donald Trump doubled tariffs on Turkish steel and aluminum imports, Erdogan described Friday's 18 percent fall in the lira to a record low as the "missiles" of an economic war waged against Turkey.

Erdogan has blamed outside forces for trying to bring down Turkey's economy.

The pound also nosedived this week.

The Washington Post newspaper said the USA 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.

The currency has fallen 66 per cent since the start of the year, pushing up the cost of goods for Turkish people and shaking worldwide investors' confidence in the country.

Investors were already grappling with what a no-deal Brexit would mean for the continent.

The news comes as tensions between the U.S. and Turkey continue to grow over the North Atlantic Treaty Organisation ally's continued detainment of Pastor Andrew Brunson. "Failure to reverse this trend of unilateralism and disrespect will require us to start looking for new friends and allies", Erdogan said. The sanctions on two officials were announced Wednesday.

The lira has lost around 20% of its value in the last 24 hours.

The plunge in the value of the currency coupled with an inflation rate of almost 16% could cause a lot of damage to Turkey's economy.

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