U.S. seeks to stab Turkey in the back: Turkey's president - USA

The Turlisk lira slumped over 20% in the last four days

On August 10, Trump announces he has doubled steel and aluminium tariffs on Turkey to 50 percent and 20 percent respectively.

The lira has tumbled as investors question whether President Recep Tayyip Erdogan's government can cope with problems including a diplomatic spat with Washington that has resulted in higher US tariffs.

"I want them to know that we will not surrender. We will implement these", he said.

The United States and Turkey are in disagreement over the Syria conflict and over the fate of Turkish preacher Fethullah Gulen, who is in exile in the U.S. and whose extradition Ankara has requested over his alleged role in the failed July 2016 coup. USA officials maintain there is no credible evidence against Brunson, and the Trump administration has negotiated for weeks to secure his release.

USA political and economic pressures helped push Turkish over the brink, but exchange-rate related downward pressure on the lira has been going on for many months. It was not immediately clear when the tariffs are due to take effect.

The lira has been hammered by worries over President Erdogan's handling of the economy, a refusal to raise interest rates to curb rampant inflation and worsening ties with the US. "We will be taking the necessary steps with our banks and banking watchdog in a speedy manner", he said. Turkey responded by ordering the freezing of assets related to the U.S. "justice and interior" secretaries.

USA support for Kurdish rebel groups fighting Islamic State (IS) fighters in northern Syria is another major difficulty, given Turkey's battle against a Kurdish insurgency in its own country.

Brunson was transferred from prison to house arrest last month, but the Turkish government has declined to release him from custody. "This is called carrying out an operation against Turkey", he told reporters on Sunday, Aug. 12. He is facing up to 35 years behind bars if found guilty. His trial is set to resume in October.

He said there was no basis for the recent exchange rates development. US officials, including US Ambassador to Turkey John R. Bass, similarly said the accusations have no merit.

South Africa, Argentina, Mexico, Brazil and Russian Federation have all seen their currencies slip over the past week because, like Turkey, they remain heavily dependent on foreign capital, especially the dollar.

It was unclear how Erdogan meant to enforce the boycott. "This is not among the rules of World Trade Organization".

The JP Morgan report said the hit on the core capital would be "a significant but manageable" 87 basis points for ING and 53 basis points for BBVA.

"Erdogan is likely trying to publicly signal he could go over to the dark side, aka the anti-NATO, Putin side".

The dispute has caused the lira to go into freefall, with the Turkish currency losing a fifth of its value to the dollar in the last week.

Germany's VDMA engineering association said that machinery exports to Turkey had fallen almost 5 percent from January to May compared with the first five months in the previous year.

For a third consecutive day, Turkey's leader has called on his compatriots to exchange the dollars and the euro they have to support the Turkish currency.

"The fluctuation in the Turkish Lira is a plot against Turkey, but the Turkish people will not give in", the Turkish president defiantly said on Sunday in a live speech in northwestern province of Trabzon, sharply criticizing the United States of waging an "economic war" against his country.

Investors are anxious about the political clash with the United States intensified and the Turkish government's lack of measures to tackle the problems plaguing its economy.

Erdoğan has refused to accept interest rate hikes and other measures that could stabilize Turkey's economy and has instead blamed the crisis on global "economic terrorists".

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