Let’s double down on Turkey sanctions

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It comes as US President Donald Trump doubled tariffs on Turkish steel and aluminium, further hurting the lira.

Turkish President Recep Tayyip Erdogan on Saturday rejected "threatening language" of the USA administration.

Turkey is at loggerheads with the USA in one of the worst spats in years over the almost two-year detention of American pastor Andrew Brunson and a host of other issues.

Washington and Ankara are at odds over the detention of United States evangelical pastor Andrew Brunson on terrorism charges in Turkey. Turkey has mostly done that to itself - until, that is, Trump started tweeting.

Turkey's currency, the Lira, plunged on Friday sparking concerns about the country's financial stability as investors anxious about Turkey's president's economic policies and a dispute with the U.S. "Washington feels that President Erdogan is moving out of the United States orbit, and has raised the issue of religious missionaries that is Turkey and is accused of collaborating with the people in the coup".

"Those who have dollars, euros or gold under their pillows should go and exchange them into [Turkish] lira".

'This is a national, domestic battle.

Economic experts believe the sharp fall of the lira is mainly because of concerns about the government's economic policies.

The lira's plunge is one of the most serious economic crises that Erdogan has faced since coming to power in 2003 in the wake of a financial crisis in 2001 that brought the economy to near meltdown.

Turkish newspaper Hurriyet and other media reports quote Erdogan as making the comment to a group of worshippers following traditional Muslim Friday prayers during a visit to the northern city of Bayburt.

The currency slid almost 8 percent in relation to the dollar to a record low of 6.59 shortly after Trump announced the increase on metals duties on Twitter. High level meetings in Washington between USA and Turkish officials ended this week without an apparent resolution. "Don't heed them. Don't forget, if they have their dollars, we have our people, our God", Erdogan said.

Albayrak, who formerly served as energy minister, yesterday announced what he has described as a "new economic model" for Turkey but he focused on macro-economic issues and steered well clear of tackling the currency crisis. But invoking national security is the only way to square Trump's policy with US law and WTO rules. The U.S. has already imposed financial sanctions on two Turkish ministers and has warned there could be more measures - the doubling of tariffs might be that move.

He also condemned as "unacceptable, irrational and ultimately detrimental", the sanctions imposed by the U.S. on several Turkish cabinet members over the Brunson issue.

Brunson's charges include spying for the PKK - listed as a terrorist group by both the U.S. and Turkey - and Fetullah Terrorist Organization (FETO).

"Over the years, Turkey rushed to America's help whenever necessary", he said, listing a few occasions the two countries acted together. Rate increases are the central bank's main tool to support the currency and fight inflation.

The lira crashed days ago as tensions between the United States and Turkey began to rise. He seems to see Turkey's collapsing currency not as an existential threat to their economy they are trying to forestall, but rather as something they actively want to try to make their exports more competitive.

Turkey's economy is regarded as fragile because of its high debt, which the worldwide Monetary Fund estimates is 50 percent of its gross domestic product.

Erdogan's "tight grip" on the central bank and the fact "higher interest rates do no fit with Turkey's economic growth strategy" meant that the central bank has kept interest rates on hold, Nora Neuteboom, economist at ABN Amro, told AFP.