Erdogan warns Turkey’s partnership with U.S. ‘in jeopardy’

Erdogan warns Turkey’s partnership with U.S. ‘in jeopardy’

Trump's "jubilation in inflicting economic hardship on its North Atlantic Treaty Organisation ally Turkey is shameful", Zarif wrote on Twitter.

The Turkish lira hit record lows against the dollar on Saturday as the country faces an "economic war" against the US.

President Recep Tayyip Erdogan vowed on Saturday to defy USA "threats" over a detained pastor, showing no signs of concessions in a bitter row that has caused the Turkish lira to crash.

The diplomatic dispute with the USA was one of the triggers for the turmoil this week.

As the lira tumbled in value - with no breakthrough in sight in the impasse with the United States, sparked by the jailing of American pastor Andrew Brunson - the government has remained sanguine with few comments aimed at rallying markets.

In addition to the Brunson case, Washington is seeking the release of three locally employed US embassy staff.

After inconclusive talks this week on solving the spat, Trump took advantage of Turkey's turmoil on Friday to turn the screws on the country.

Washington in response sanctioned two Turkish ministers and Trump on Friday announced it was doubling the tariffs on steel and aluminum imports from Turkey, saying relations with Ankara were "not good at this time".

Relations between the US and Turkey have deteriorated further this week as US President Donald Trump raised tariffs against Turkish aluminium to 20% and to 50% in terms of steel.

Mr Erdogan also wrote in the New York Times that unless the U.S. changed course, Turkey would look for new friends and allies.

He declined to specifically mention any countries by name, although the comments come amid an ongoing row with the United States and after the Trump administration increased tariffs on Turkish steel and aluminum on Friday. "The tweet is mightier than the Turkish sword", Cristian Maggio, head of emerging markets strategy at TD Securities, said in a note to clients.

More news: Busy Everton end transfer deadline day satisfied thanks to arrivals from Barcelona

Turkey also wants the United States to extradite Fethullah Gulen, a Pennsylvania-based Muslim cleric who Turkish authorities say masterminded the coup attempt against Erdogan in which 250 people were killed. It did not disclose details, but suggests Turkey might gravitate further away from its North Atlantic Treaty Organisation allies toward cooperation with Russian Federation, whose relations with the West are at their lowest since the Cold War.

The tensions with Washington have, for investors, underscored Turkey's authoritarian trajectory under Erdogan.

"If you have dollars, euros or gold under your pillow, go to banks to exchange them for the Turkish lira. This is a domestic and national struggle".

Erdogan said buying the lira was a patriotic duty for Turks, in what has become an "economic war" against foreign powers, most likely referring to the US.

Treasury and Finance Minister Berat Albayrak - who is Erdogan's son-in-law - tried to ease investor concerns during a conference, saying the government would safeguard the independence of the central bank.

The currency drop is particularly painful for Turkey because the country finances a lot of its economic growth with foreign investment. Hard currency debt issued by Turkish banks suffered similar falls.

Coupled with an inflation rate of almost 16 percent, that could cause a lot of damage to the local economy.

This plunge has caused food, fuel and rental prices to surge across the country. "On some days, I end the day with a loss".

The lira, Trump noted on Twitter, "slides rapidly downward against our very strong Dollar!"

The currency, which traded 4.7 to the dollar a month ago, has now weakened to 6.4 to the dollar, having lost more than 30% of its value this month, 20% of which accrued in the last 24 hours.

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