As Turkey's currency tumbles, contagion fears rise

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Turkey's steel exports were valued at $11.5 billion past year, accounting for 7.3 percent of its total exports worth $157 billion, according to the Turkish Steel Exporters' Association.

The United States is the biggest destination for Turkish steel exports with 11 percent of the Turkish export volume. "Our relations with Turkey are not good at this time!".

But he can't say that without exposing his tariffs to an airtight legal challenge.

The currency has already fallen 36 percent in 2018 and has slid against the dollar on Friday.

Now at a new record low, Turkey's currency has lost more than 40% this year.

Lira tested an all-time low of 6.95 in value against the Dollars, in a sign of a further economic crisis. The weakened currency's value has helped increase inflation and anxious global investors.

The Lira has lost almost a third of its value this year, as relations with the United States have become increasingly strained.

Mr Erdogan also remained defiant, as he urged the Turkish people to exchange foreign currency or gold for lira.

While Dryden and other analysts say Turkey's problems aren't a major risk to the financial system, investors didn't wait to find out Friday.

Mr Erdogan has been putting pressure on the central bank to not raise interest rates in order to keep fuelling economic growth.

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Axios reported that the Turkey is trying to lessen their dependence on Russian Federation, and the increased sanctions will make their goal more challenging to reach.

Turning to the economic effects of the diplomatic row, President Erdogan said: "If they have the dollar, we have Allah".

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.

Trump intensified the alarm on financial markets with his new tweet doubling the tariffs, noting for good measure the lira was sliding "rapidly downward against our very strong Dollar!".

Investors piled into "safe" government debt, with German yields hitting three-week lows and the yield on the benchmark US 10-year Treasury note falling to 2.88822 percent. Relations between the United States and Turkey have been weakening for several reasons.

Turkish authorities arrested Brunson in December 2016, claiming that he was a spy and was linked to a failed plot to overthrow the government.

Relations between the two North Atlantic Treaty Organisation allies have sunk to their lowest point in decades over a number of issues including the detention of United States pastor Andrew Brunson on terror-related charges, prompting the Turkish lira to hit record lows against the dollar.

For one, the 2016 detention of an American evangelical pastor named Andrew Brunson, has aggravated tensions.

During his speech Erdogan expressed regret that, in his words, the United States showed readiness to exchange its strategic ally in NATO Turkey by Andrew Branson.

"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.

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