Turkey shaken by financial fears, Trump rattles it further

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Trump decided in March to impose import duties of 25 percent on steel and 10 percent on aluminum imports from several countries, including Turkey.

Brunson's charges include spying for the PKK, listed as a terrorist group by both the USA and Turkey, and the Fetullah Terrorist Organization (FETO), the group behind the defeated coup attempt in Turkey of July 2016. Mr Brunson denies the charge.

A delegation of Turkish officials held discussions with their counterparts in Washington this week but there was no sign of a breakthrough. All week, the lira has been under pressure, which accelerated with the failure of diplomatic talks in Washington this week.

Ankara and Washington have been at odds over the detention of the American evangelical pastor Andrew Brunson on terrorism charges, a matter that Trump has discussed directly with Turkish President Recep Tayyip Erdogan over the phone, The New York Times reported.

"We think that Erdogan needs to act now if he does not want Turkey to develop into a mini-Venezuela (worst case scenario)".

President Recep Tayyip Erdogan, who had remained unusually silent until now as the lira crisis mounted, urged Turks to take matters into their own hands. "We will not lose the economic war", state-run TRT Haber television quoted Erdogan as saying. But given that Turkey is in the midst of an economic crisis, it might prove an effective one.

The Turkish president added that North Atlantic Treaty Organisation could lose an ally.

"Some countries have engaged in behavior that protects coup plotters and knows no laws or justice", he said. Turkey answered the March tariff announcement by placing its own tariffs on $267 million of US goods.

Erdogan's claim of a Western political plot against him sparked alarm in investors and prompted an acceleration in the currency sell-off. The lira fell further after Mr Trump's tweet.

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

The Turkish lira fell around 16% against the United States dollar on the day, from $0.18 to $0.15 as of 3pm BST.

Turkish President Recep Tayyip Erdogan spoke before the nation twice on August 10, but the country's currency continued its descent, reaching about 6.4 lire per dollar, a decline of about 14.6 percent.

The Turkish president called on Turks to exchange dollars, euros and gold for Turkish lira. This is a national struggle.

Erdogan's decision to name his son-in-law as finance minister also made people wonder about the direction of the country's economic policy.

The Lira is now down over 26pc in the past month and 40pc since the start of the year, raising investor fears that the situation could quickly spiral from a currency crisis into a full-blown credit event. Shares of European lenders also dropped, hit by concern about their Turkish exposure. "There are so many rumors percolating that large companies are going bankrupt", said analyst Yesilada. "I am afraid there will be a bank run in Turkey, people rushing to withdraw their deposits".

The mere fact that the USA would impose sanctions on Turkey - a stalwart North Atlantic Treaty Organisation ally for decades during the Cold War - has increased uncertainty about the future in Turkey.

"We are moving forward with the project, but believe that imposing a tax on pre-existing orders is unjust, especially considering the specific materials we purchased overseas were not readily available in the US", Willie Chiang, Plains' chief operating officer, said on Tuesday. "Turkey's awkward diplomatic relations with the west, and the USA in particular, also need to be addressed and remain a deep concern for foreign investors".