The embattled Turkish lira tumbled nearly 20 percent to new record lows against the dollar on Friday as strains with the United States intensified, but President Recep TayyipErdogan defiantly proclaimed Turkey would emerge victorious in an "economic war".
According to Bloomberg, President Trump has jeopardized the United States' alliance with Turkey by doubling the tariffs he already imposed on Turkish steel and aluminum imports in an effort to punish Turkish President Recep Tayyip Erdogan for detaining American Pastor Andrew Brunson, who allegedly participated in a failed coup.
"Because this is the language they understand".
His comments on interest rates - and his recent appointment of his son-in-law as Finance Minister - have heightened perceptions that the central bank is not independent.
President Recep Tayyip Erdogan on Sunday (Aug 12) said the crash of the Turkish lira, sparked by a bitter dispute with the United States, was a "political plot" against Turkey and warned Ankara would now seek new markets and partners.
His tone echoed that of a speech given on Thursday when he told supporters that "if they have dollars, we have our people, our righteousness, and our God". He says higher interest rates lead to higher inflation, the opposite of what standard economic theory says.
"We know very well that the issue is not the dollar, the euro or gold".
Concerns over Turkish President Erdogan's tight grip on the countries monetary policy, failed plans to release an American citizen held in Turkey, and shifts in global power prompted the continued plunge of the Turkish economy.
He said his government had taken measures in response, and would continue to do so.
Erdoğan had warned Saturday that Turkey would start looking for new friends if the USA continued with its unilateral actions against a North Atlantic Treaty Organisation ally, in a diplomatic row that has sent Ankara and Washington relations to a new low.
Since then, its relationship with Turkey, the sixth largest steel importer to the U.S., the world's biggest steel importer overall, has deteriorated, prompting Ankara to send a delegation this week to Washington to meet with both the State and Treasury Departments.
Iranian Foreign Minister Mohammad Javad Zarif listens during a meeting between the Iranian president and the North Korean foreign minister in the capital Tehran on August 8, 2018.
Trump's "jubilation in inflicting economic hardship on its North Atlantic Treaty Organisation ally Turkey is shameful", he wrote.
"The US has to rehabilitate its addiction to sanctions [and] bullying or entire world will unite - beyond verbal condemnations - to force it to".