Economic turmoil hits Turkey, US bank stocks react

11 August, 2018, 16:12 | Author: Brooke Harris
  • Berat Albayrak

On June 21, Turkey's retaliatory tariffs went into effect on 4 to 70 percent of more than $1 billion worth of US goods.

Both currencies added to losses after U.S. President Donald Trump said he had authorized a doubling of tariffs on steel and aluminum imports from Turkey.

"This innocent man of faith should be released immediately", Trump previously wrote on Twitter when it became clear Turkey would not release the evangelist, who was ordered to be held under house arrest.

The United States is the biggest destination for Turkish steel exports with 11% of the Turkish export volume.

US patience with Turkey is seen to have ended, experts said.

Turkey imposed $266.5 million in tariffs against the U.S. in June, targeting American imports of coal, paper, walnuts, almonds, tobacco, whiskey and machinery, amongst other items.

A widening rift with the United States, its main North Atlantic Treaty Organisation ally, and President Tayyip Erdogan's grip on monetary policy under a new powerful executive presidency have helped to drive the lira down by more than 40 percent this year, a particular vulnerability for Turkish banks as over a third of their lending is in foreign currencies.

"If there is anyone who has dollars or gold under their pillows, they should go exchange it for liras at our banks", he said during an address to supporters.

Erdogan won re-election in June and has secured an empowered presidency, leaving him freer to confront the country's economic challenges.

Mr Trump intensified his spat with Turkey by imposing the higher tariffs, putting unprecedented economic pressure on a North Atlantic Treaty Organisation ally and deepening turmoil in Turkish financial markets. As the currency drops, Turkish companies and households with debt in foreign currencies see their debts expand. The lira fell further after Mr Trump's tweet.

Zimbabwe presidential inauguration delayed after court appeal -Minister
The MDC reported that its foreign lawyers had initially been denied entry into the Constitutional Court on work permit grounds. Under the constitution, a losing presidential candidate has seven days to challenge the result from when a victor is declared.

Coupled with an inflation rate of almost 16 per cent, that could cause severe damage to the local economy. The sanctions on two officials were announced Wednesday.

UBS chief economist for EMEA emerging markets Gyorgy Kovacs said a giant rate hike of 350-400 basis points would be "consistent with real rate levels that in the past helped to stabilise the currency" but warned a deal to normalise ties with the U.S. may also be needed.

High-level meetings in Washington between USA and Turkish officials over Brunson ended this week, apparently without a resolution.

Turkey accounted for 373 million euros of BBVA's its first half net attributable profit, 14 percent of the group total, suggesting that it may be the most vulnerable to the country's market turmoil.

The timing of Mr Trump's tweet coincided with an announcement by Turkey's Treasury and Finance Minister Berat Albayrak of the government's new economic policy which is aimed at restoring confidence in the lira.

The lira, which has lost more than 40 percent this year, hit a new record low after Trump took steps to punish Ankara in a wide-ranging dispute.

"He spoke today sounding very combative and defiant instead of possibly offering a bit of fig leaf to the US", said Franulovich. Albayrak is the Turkish President Recep Tayyip Erdogan's son-in-law.

Some economists were less impressed by the government's handling of the crisis. The U.S. responded by slapping sanctions on Turkey and threatening more.

He appeared to blame foreigners for trying to hurt Turkey, saying: "This will be my people's response against those waging an economic war against us".

"A US-induced crisis in Turkey will create a new martyr in the region, with far-reaching consequences which American congressmen and President Trump do not foresee", Bulent Gultekin, a professor at the Wharton School of the University of Pennsylvania and the former Turkish Central Bank governor, told MEE.

Recommended:

  • Another Powerful Quake Hits Lombok and Bali; No Tsunami Warning

    Another Powerful Quake Hits Lombok and Bali; No Tsunami Warning

    Sunarto, who uses one name, said hearing the call to prayer and being observant will help villagers rebuild from the disaster. Rescue workers are still digging through rubble and trying to get aid to survivors of the earlier, larger quake.
    Trump authorizes doubling of tariffs on Turkey's steel, aluminum

    Trump authorizes doubling of tariffs on Turkey's steel, aluminum

    Minutes before Ankara learned about the higher tariffs, the lira had already hit an all-time low of 6.87 against the dollar. In Europe, where exposure to Turkey is far higher, Germany's DAX fell by 1.7% and France's CAC by 1.2%.
    Samsung launches Fortnite for Android exclusive

    Samsung launches Fortnite for Android exclusive

    The one you see in the image above is the 42mm one, as it also comes in a black 46mm variant for those that have massive wrists. You can plug it into an external monitor and make it into a desktop computer (though, in my opinion, a really crappy one ).
  • A mechanic dies after stealing a Horizon Airlines Plane

    A mechanic dies after stealing a Horizon Airlines Plane

    Radar showed that it flew in circles above Ketron Island before going down so maybe the pilot was trying to find a landing zone. A mechanic stole a propeller airplane at Seattle-Tacoma International Airport on Friday before crashing it, authorities said .
    Kylie Jenner celebrates 21st birthday with star-studded Hollywood bash

    Kylie Jenner celebrates 21st birthday with star-studded Hollywood bash

    For starters, her Rapunzel-inspired 'do was platinum blonde, marking the first major color change Kylie has made in months. Momager Kris Jenner reportedly offered up a sweet toast to her youngest daughter as pink confetti fell from the ceiling.
    José Mourinho does not expect any Manchester United deadline-day signings

    José Mourinho does not expect any Manchester United deadline-day signings

    When asked if he was happy for City to be favourites, he said: "Since nine years I live with that situation, it's no problem". Last season's champions, Manchester City are the opposition for Unai Emery's first competitive match in charge of the Gunners.
  • Arson wildfire threatens thousands of homes south of Los Angeles

    Arson wildfire threatens thousands of homes south of Los Angeles

    Clark refused to go to court on Thursday, so his arraignment was rescheduled for today, according to the Associated Press . Whipping winds, record-breaking heat, and drought-plagued brush have combined to fuel the historic fires.
    Whitmer wins Democratic nomination for MI  governor

    Whitmer wins Democratic nomination for MI governor

    During his victory speech at Dow Diamond baseball field, Schuette said he's ready to take her on in the general. Laura Kelly, of Topeka, won the state's Democratic nomination, defeating four other candidates.
    How to see the Perseid meteor shower peak this weekend

    How to see the Perseid meteor shower peak this weekend

    If you're counting meteors, notice there are times when numerous meteors are visible followed by a near absence of activity. The comet that left the Perseid meteor stream is a piece of dirty ice about 26km in diameter called 109P/Swift-Tuttle.
  • Turkish Lira Plummets; Erdogan Pledges Economic War

    Turkish Lira Plummets; Erdogan Pledges Economic War

    On 26 July, Trump and Vice President Mike Pence threatened sanctions if Brunson was not instantly released. Erdogan enjoys the support of many Turks even though rents and food and fuel prices have all surged.
    Everton Agree Deal to Sign Mina From Barcelona

    Everton Agree Deal to Sign Mina From Barcelona

    Mina could thus, be a top signing for Everton , depending on how quickly he can settle in the Premier League. This is a great opportunity for me and I am looking forward to competing here.
    First lady of cricket

    First lady of cricket

    But the cricket fans got stuck on this one person who was standing in the very first row next to captain Kohli. Celebrated Bollywood actor and wife of the Indian captain, Anushka Sharma can also be seen in the photograph.


Popular

Flash floods kill 27 in south India
The assurance was given by Home Minister Rajnath Singh to Kerala Chief Minister Pinarayi Vijayan during a telephonic conversation. The Army pushed its men and machinery into disaster relief and rescue operations at Kannur, Kozhikode, Wayanad and Idukki .

Sony's Marvel Universe Plans - Every Movie Currently Happening
Per Variety , we know Sony has already drawn up plans for Silk , Nightwatch , Morbius , Jackpot and Kraven the Hunter . However, she will remain as a producer for the upcoming Black Cat and Silver Sable solo films.

NASA's mission to 'touch the sun' starts tomorrow
Successive flybys will be closer, culminating, in 2024, with a series of encounters just 3.8m miles above the sun's surface. And now, six decades later, a spacecraft that will revolutionize our understanding of the phenomenon is prepared to launch.

With Fortnite's Android Release, Epic Will Skip Google Play
Malware can also come bundled with the actual official Android version of the game downloaded from an unofficial third-party. Will going off market plunge you into Android gloom? Check out our guide below to see how to install Fortnite for Android .

How to watch the PGA Championship on Eleven Sports
Open champion is dating model/actress Jena Sims . "It's going to be a big atmosphere out there and I'm looking forward to that". And when Johnson became engaged to Paulina Gretzky, many of those fans became fans of the former U.S.

Arsenal coach Unai Emery: Stan Kroenke takeover of club is 'positive'
But then also we need to build [a mentality] and it isn't a thing you find quickly. He insisted that balance is most important thing in the team.

Abby Huntsman to depart Fox for ABC's 'The View'
McCain replaced former Fox News contributor, Jedediah Bila , who described herself as "libertarian", previous year . As Radar readers know, Whoopi Goldberg , Joy Behar and Sunny Hostin are also part of the cast.

Redskins RB Derrius Guice out for season with torn ACL
Rookie Derrius Guice's much-anticipated debut season in the National Football League is already over before it began. It also could be a tandem effort with Robert Kelley, who has started before.

Perseid August 2018: When can I see the meteor shower?
No special equipment is needed to enjoy this nighttime spectacle, just a dark sky and some patience. "So don't rush the process". Will you be watching the meteor shower? According to NASA , the Perseids have been observed for about 2,000 years.

James Bond Producers Reportedly Eyeing Idris Elba As Next 007
Twitter user @wordtoJude felt this news was a long time coming - "IVE BEEN ASKING FOR THIS FOR YEARS. Yet, rumor or not, people online seem pretty excited about the idea.