Turkey's Erdogan stands by opposition to high interest rates

Turkish lira update market drop

Turkish lira Dow Jones drops 200 points after Turkey currency fears

Turkey and the USA are now experiencing rocky relations following Washington's imposition of sanctions on Interior Minister Suleyman Soylu and Justice Minister Abdulhamit Gul for not releasing American Pastor Andrew Brunson, who faces terrorism charges in Turkey.

Erdogan blamed his country's economic downturn on the U.S. and other nations that he claims are waging "war" against his country.

Markets have been deeply concerned about the direction of domestic economic policy under Erdogan with inflation hovering around 16% as the central bank refuses to raise interest rates in response. It hit a record low after Trump announced he had authorized higher tariffs on imports from Turkey, imposing duties of 20 percent on aluminum and 50 percent on steel.

Recep Tayyip Erdogan was responding to a drop in the value of the Turkish currency, the lira, against the US dollar following the imposition of sanctions and tariffs by the United States in the past two weeks.

On Thursday Ergodan said Turkey will withstand the economic pressure.

Turkish President Recep Tayyip Erdogan is continuing his pushback against United States actions that now have investors concerned as the nation inches closer to a financial crisis, according to Bloomberg. "Our relations with Turkey are not good at this time!"

He said there were also no plans for a meeting with U.S. officials on the sidelines of the UN General Assembly in NY next month, which both Iranian President Hassan Rouhani and Trump are due to attend.

Without naming any country, Erdogan said that those - who stand against Turkey for the sake of small calculations - would pay the price.

"If the United States does not begin to respect the sovereignty of Turkey and prove that it understands the dangers our nation faces, our partnership could be at risk".

The Turkish lira TRYTOM=D3 has always been falling on worries about Erdogan's influence over monetary policy and worsening relations with the United States.

U.S. State Department spokesperson Heather Nauert said Thursday that Washington "would define progress as Pastor Brunson being brought home".

Meanwhile, Mohammed Javad Zarif, Iran's foreign minister, accused Washington of an "addiction to sanctions and bullying".

He also said it was a pity that Washington chose Brunson over Turkey, its partner in North Atlantic Treaty Organisation, and in an opinion piece in the New York Times, he warned the United States that Ankara had other alternatives as allies. In the article, he said that Washington used 5,000 trucks and 2,000 cargo planes to deliver weapons to the Syrian branch of an "armed group that is responsible for the deaths of thousands of Turkish citizens since 1984 and that is designated a terrorist group by the U.S".

Erdogan said Turkey would be looking to form alternative economic alliances with "Iran, to Russian Federation, to China and some European countries".

Erdogan has cast the sell-off in the currency that has followed the trade row as an economic war and an attempt to undermine Turkey's economy.

Ankara has ruled out releasing Brunson, although he was granted house arrest in July.

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