The Turkish lira plunged 20% Friday after President Trump announced he would be doubling the import tariff on metal produced in that country, sending Turkey's currency to a record low against the United States dollar. "The tweet is mightier than the Turkish sword", Cristian Maggio, head of emerging markets strategy at TD Securities, said in a note to clients, with reference to Trump's comments.
On March 1, Trump had announced global tariffs of 10 percent on all aluminum to the US and 25 percent on all steel imports.
He declared: "Our relations with Turkey are not good at this time!"
"We have held a negative view on Turkey since the beginning of the year, when the Central Bank's inaction in the face of a credit-fuelled overheating of the economy was beginning to put downward pressure on the Turkish Lira and associated assets".
Turkish President Tayyip Erdogan told Turks to sell their gold and dollars to support the crumbling lira.
The Turkish lira suffered its worst one-day loss in a decade Friday after President Donald Trump announced that the United States would hike tariffs, prompting investor confidence to slump.
Trump's announcement came less than an hour after Turkish President Tayyip Erdogan urged Turks to help defend the country against what he called economic war against the country.
The lira slid to a fresh record low against the US dollar.
Turkey's woes also shook world markets, pushing down stock indexes.
Last week, the U.S.
"The situation of Turkey can not go on for much longer - I think they will have to intervene", Cristian Maggio, head of emerging markets strategy at TD Securities, adding that the intervention needed to be "drastic". He added that the country will continue to enjoy good economic relations with several major nations.
In June, the U.S. Senate passed a bill prohibiting Turkey from buying F-35 fighter jets because of Brunson's imprisonment and Turkey's purchase of Russia's S-400 air defense system.
The lira has lost more than 40 percent this year.
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.
"Don't forget", he said, "if they have their dollars, we have our people, our God". The Turkish currency shed about 17% of its value in a single day. Some 4 million displaced people, most them from Syria, are now living in Turkey.
The move follows the failure of US-Turkish talks in Washington this week to release Pastor Andrew Brunson from house arrest in Izmir after he was jailed in 2016 on charges of espionage.
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.
Analysts suggest Erdogan could have Washington in mind, given Ankara is demanding the extradition of US -based Turkish cleric Fethullah Gulen, who is blamed for masterminding the botched 2016 military takeover.