Erdogan is helpless in the face of an increasingly harsh American punishment

Erdogan is helpless in the face of an increasingly harsh American punishment



10-08-2018 10:05 PM

The Euphrates -

NEW YORK (Reuters) - US President Donald Trump has announced that he has ordered an increase in major Turkish imports from Turkish lira to lose 19 percent of its value against the dollar in a single day, while Turkish President Recep Tayyip Erdogan merely explained the crisis as a conspiracy and an "economic war" , Which reflects the widespread conviction in the Turkish street that Erdogan entered a losing battle with the West.

The US president said on Friday he had ordered an increase in duties on imports from Turkey so that aluminum import duties would be 20 percent and steel 50 percent as tensions between the two NATO member states escalated due to Turkey's capture of US and other diplomatic disputes over Syria or Ankara's bid to buy the S- 400 from Russia without taking into account the requirements of its membership in NATO.

"I just ordered the doubling of steel and aluminum fees for Turkey as their currency, the Turkish lira, retreated rapidly against our very strong dollar," Trump said in a tweet on Monday morning.

"Aluminum charges will be 20 percent and steel 50 percent," he said, concluding that "our relations with Turkey are not good at present."
On the other hand, the deterioration of the Turkish lira registered a sharp decline of 19 percent in one day against the dollar, and was traded at the level of 6.6115 pounds per dollar at 13:35 TG, after reaching 6.87 lira to the dollar after the Trump Declaration.

The Trump administration has charged 10 percent for aluminum imports and 25 percent for steel imports from the world, including Turkey since March.

Turkey's handling of US actions is contrary to expectations by investors who expect the authorities in Ankara to take steps to halt the deterioration, including financial measures including increased interest rates to curb inflation and urgent political issues related to the release of American Rev. Andrew Branson.

Erdogan on Friday urged the Turks to convert their foreign currency holdings to support the lira, whose collapse accelerated after he called for a "national struggle" against an "economic war" on his country. "Those who think they will make us bow down through economic fraud do not know us at all," he said.

In a speech in Bayport, northeast of the capital, R. "If you have money in dollars, euros or gold to spare, go to the banks to convert them into the Turkish lira, it's a national struggle."
Analysts and economists say Turkey's problems are deepening by the increasingly authoritarian leadership of Erdogan and his unconventional views on interest rates, which he described as "the root of all evils" because they are usury.

This view shows that the imbalance in monetary policy has made the Turkish central bank move to contain inflation, which now stands at close to 16 percent.

After his reelection last June, the president himself was given the power to appoint Turkey's central bank governor. His subsequent appointment to his brother-in-law, Albert Albert, to be the Treasury and Finance Department, was seen as a tightening of his grip on power.

Murat Cetinkaya, governor of the central bank, insisted late last July that the bank was operating without any political interference, but for many investors the bank's decision to keep interest rates unchanged last month undermined that claim.

"The pound has reached this cheap level because all people have lost confidence," Charles Robertson, chief economist at ReneSanskapital, told the Financial Times.

"The overall issue that disturbs investors is the rule of one man," said Atabay Chaneli, a former director at the Agel & Co Center for Strategic Studies in an article in the Turkish affairs website.

Investors now see Erdogan's disturbing comments to Bloomberg Television in May, in which he pledged to cut interest rates after the June 24 presidential election, are being implemented and increasingly believe the Turkish economy is no longer in capable hands, but is directly subject to the whims of the president and associates from him.

It is clear that the failure to manage the lira crisis reflects a broader crisis in Turkey, which is the failure of Erdogan to build foreign relations contribute to the Turkish economy. The Turkish president's positions during the past years created tension with his European and Arab regional environment.

Analysts say that the Turkish economy was able to absorb the remnants of the diplomatic crisis with the United States if it maintained strong economic relations with the Arab countries, especially the Gulf countries, whose markets could be a substitute for the Turkish products that are now subject to sanctions, pointing out that Erdogan Is now reaping the results of his choice by antagonizing his Arab surroundings.

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