Published: Tue, August 14, 2018
Finance | By Loren Pratt

U.S. dollar rises to 13-month high against Singdollar on Turkish crisis

U.S. dollar rises to 13-month high against Singdollar on Turkish crisis

The Turkish currency's slide comes amid rising tensions between the USA and President Recep Tayyip Erdogan over trade.

President Recep Tayyip Erdoğan said Tuesday that Turkey will impose a boycott against US electronic products amid an ongoing and deepening rift between the two North Atlantic Treaty Organisation allies over a number of issues.

The weakness of the Turkish currency has rippled through global markets, with its drop of as much as 18 percent on Friday hitting US and European stocks as investors fretted about banks' exposure to Turkey.

The fall out has showed no signs of abating as U.S. president Donald Trump approved doubling tariffs on Turkish steel and aluminum while Mr Erdogan has vowed to retaliate.

Earlier in Asia on Monday, the lira had traded at a new low of 7.24 to the dollar.

"As of Monday morning, our institutions will take the necessary actions and will share the necessary announcements with markets", Albayrak was quoted as saying while adding that the plan would centre on "the state of our banks and the small and medium size enterprises" most affected by the lira's plunge.

The Turkish lira sunk 7 percent Monday after dropping roughly 20 percent Friday amid growing concerns over the country's economy and souring ties with western allies.

Slamming the USA sanctions on Turkey over the arrest of Pastor Andrew Brunson, Turkish President said Ankara faces an "economic attack". "This is called carrying out an operation against Turkey", he told reporters on Sunday, Aug. 12.

"We are once again facing a political, underhand plot".

"There is the World Trade Organization but when we look at these steps taken [against Turkey] does it have anything to do with the principles of World Trade Organization?"

"We will boycott USA electronic products", he said. Last Friday alone, the currency depreciated by 14 per cent.

Erdoğan also said that the USA stabbed Turkey in the back, three days after he sought to bolster ties with Russian President Vladimir Putin.

"We can only say "goodbye" to anyone who sacrifices its strategic partnership and a half-century alliance with a country of 81 million for the sake of relations with terror groups", he said."You dare to sacrifice 81-million Turks for a priest who is linked to terror groups?"

Erdoğan reiterated the Turkish government's view that the recent downturn in Turkish lira and stocks was caused by an attack by U.S. President Donald Trump and his administration.

Trump urges Erdogan on Twitter to free him, describing his continuing detention as "a total disgrace".

A delegation led by Turkish Deputy Foreign Minister Sedat Onal failed to secure a deal last Wednesday in talks in Washington on a number of issues including Brunson. Erdogan himself was elected prime minister in 2003 on the back of a major crisis two years earlier, but has traditionally always had Washington's staunch support. We have Vestel in our own country.

Analysts say the crisis has been a long time coming and reflects Turkey's refusal to raise interest rates to curb double-digit inflation and cool an overheated economy.

President Erdogan has been criticized for interfering in the central bank's monetary policy by reportedly not allowing the regulator to hike the interest rate to prevent the lira's collapse.

People pass in front of into a jewellery shop where gold bangles are on display in Istanbul on August 8, 2018.

"Nobody has an interest in an economic destabilization in Turkey".

The Brunson case is just one of many bones of contention between Turkey and the United States, ranging from Syria to Ankara's increasingly cosy relationship with Moscow.

Like this: