Erdogan vows Turkish economy will grow strongly

Turkish President Recep Tayyip Erdogan arrives at the 2018 NATO Summit at NATO headquarters in Brussels Belgium

Lira crashes as US slaps tariffs on Turkey

President Trump said Friday that he told his administration to double steel and aluminum tariffs against Turkey, reflecting the rapidly deteriorating state of relations between the two countries.

"Our relations with Turkey are not good at this time!" he said in an early morning post.

The moves stem from Trump's frustration over a detained American pastor held by Turkey on what USA officials say are bogus charges, two sources with knowledge of the President's mind-set tell CNN.

The Turkish currency fell more than 18 percent on Friday, increasing its costs to import raw materials, but making exports relatively cheaper.

Turkey's trade minister Ruhsar Pekcan on Friday urged the US President to return to the negotiating table on tariffs, saying the trade rift between the North Atlantic Treaty Organisation allies can and should be resolved through dialogue.

Ruhsar Pekcan said in a statement the move would not only have an impact on Turkey but affect US companies as well.

"Nevertheless, we implore President Trump to return to the negotiating table - this can and should be resolved through dialogue and cooperation".

President Donald Trump announced tariff increases on Turkish metals as tensions between Turkey and the United States escalated.

Kinder Morgan Inc, the second largest North American pipeline operator, had already ordered almost half of the specialized pipe needed for its Gulf Coast Express project from Turkish steel maker Borusan Mannesmann before the original tariff went into effect, spokeswoman Sara Hughes said.

As with the financial crisis set off by Greece in 2010, Friday's events were the latest example of how troubles in a nation with a midsize economy but world-class problems could threaten financial stability further afield.

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The U.S. was the top destination for Turkish steel exports in 2017, which were worth $1.1 billion.

"If you have dollars, euros or gold under your pillow, go to banks to exchange them for the Turkish lira".

But President Erdogan brushed off any concerns during a speech in the northeastern city of Bayburt on Friday, saying: 'The dollar can not block our path.

New Finance Minister Berat Albayrak - Erdogan's son-in-law - acknowledged that the central bank's independence was critical for the economy, promising stronger budget discipline and a priority on structural reforms.

The central bank raised interest rates to support the lira in an emergency move in May, but it did not tighten at its last meeting. This will be my people's response to those who have waged an economic war against us'.

The lira hit a record low of 6.24 per dollar on Friday, before recovering to 5.92 - still down a whopping 7 per cent on the day. Hard currency debt issued by Turkish banks suffered similar falls.

"I'm not aware of any prior administration using tariffs in this way, and there's a very simple reason: because they're an incredibly blunt instrument that often can have blowback on American workers and consumers as we've seen in the China context", said Ned Price, a former Central Intelligence Agency officer who also served as a National Security Council spokesman during the Obama administration.

The new set of economic steps are aimed at securing an economic growth of 3-4 percent in 2019, and decreasing the inflation rate to single digits, the Ministry of Treasury and Finance said in a press release on August 9.

In an opinion piece in the New York Times on Friday, Erdogan said Turkey's partnership with the United States could be in jeopardy unless Washington "starts respecting Turkey's sovereignty".

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