Erdogan vows to defy USA 'threats' after currency crash

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Turkey's president on Saturday blamed the country's economic downturn on the United States and other nations that he claims are waging "war" against his country.

Turkish President Recep Tayyip Erdogan won another term in office in June with expanded powers.

Reverberations spread through global financial markets, with European stock markets especially hit as investors took fright over banks' exposure to Turkey.

The 64-year-old also highlighted the major difficulty in battling the Kurdish insurgency which has full U.S. support for fighting Islamic State fighters in northern Syria.

The lira tumbled 13% in one day, to 6.51 per United States dollar, a massive move for a currency that will make the Turkish poorer and further shake worldwide investors' confidence in the country.

Relations between the two countries deteriorated in the wake of US President Donald Trump's decision to increase tariffs on Turkish aluminum and steel to 20% and 50% respectively.

The lira slid to a fresh record low against the USA dollar.

His chief advisor and spokesperson Ibrahim Kalin pointed out more blatantly that the U.S. might lose Turkey for good. Financial upheaval there risks further destabilising an already volatile region.

Erdogan vowed there would be no easing of the law in Brunson's case: "We have not made concessions on justice so far, and we will never make any", he said.

Trump tweeted on Friday that he would be doubling existing tariffs on steel and aluminum imports from Turkey. The White House said he had authorized them under asection of USA trade law that allows for tariffs on nationalsecurity grounds.

USA additional steel tariffs on Turkey to begin August 13
Later speaking in northeastern Rize province, Erdogan spoke of Turkey's plans to trade in local currencies with some countries. Deteriorating ties between the USA and Turkey - both North Atlantic Treaty Organisation members - have also alarmed investors.

But analysts say that while there may be losses at banks, Turkey's economic problems do not pose a big threat to Europe or other big economies, like the United States.

A financial shockwave ripped through Turkey on Friday when its currency nosedived over concerns about the country's economic policies and a deepening row with the US.

It's an awkward triangle, given that Turkey is a Nato member, Russian Federation is Nato's number one threat and the organisation is obliged to defend any member that is attacked.

Erdogan said Turkey is not afraid of outside "threats".

Despite Trump's insistence, Turkey has not budged in freeing American pastor Andrew Brunson, who has been detained by Turkey for nearly two years on charges that he was working with a terrorist organization and was a spy.

On Friday, Erdogan asked Turkish citizens to sell off their gold and dollars and exchange them for the lira, in an attempt to prop up the currency.

Meanwhile, Ankara is wanting the extradition of Fethullah Gulen, a Pennsylvania-based cleric who is blamed by Mr Erdogan for masterminding the 2016 coup.

Andrew Brunson has been in Turkish custody since 2016, when he was arrested on charges of terrorism and support of a group held responsible for an attempted coup of Turkish President Recep Tayyip Erdogan.

His cause resonates with Mr Trump's Christian conservative supporters.

"This could be the most expensive pastor in world history", Sekulow said, referring to the harm being done to Turkey's economy.

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