Trump vows to double steel and aluminum tariffs on Turkey

Rand pushes past 14 to dollar as Turkey woes weigh on currency

Rand weakens over 2 per cent, breaches 14/dollar as emerging markets rattled

President Donald Trump says he's just authorized the doubling of steel and aluminum tariffs "with respect to Turkey".

Erdogan replied that Turkey will not back down despite Trump's sanctions policy and said he would answer with mirror retaliation.

Turkey's embattled lira on Friday hit new record lows against the USA dollar and euro, losing over seven percent in value as strains with the United States showed no sign of abating and fears grew over the exposure of European banks.

The Turkish President Recep Erdogan urged Turks to sell dollars and gold and buy lira.

Waves from the crisis spread overseas, with investors selling off shares in European banks which have large exposure to the Turkish economy.

Treasury and Finance Minister Berat Albayrak - who is Erdogan's son-in-law - tried to ease investor concerns during a conference, saying the government would safeguard the independence of the central bank. The lira is now down 36% this year and bond yields have sky-rocketed.

The unorthodox approach of the president, who has dominated Turkish politics for more than 15 years, has unnerved investors who have voiced concerns over Turkey's authoritarian trajectory under Erdogan. He said the country was facing an "economic war" and blamed the selloff on credit ratings agencies and a shadowy "interest rate lobby", according to Reuters.

He appealed to a crowd in the city of Bayburt to exchange dollars and gold for Turkish lira to prop up the plunging currency.

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But President Erdogan brushed off any concerns during a speech in the northeastern city of Bayburt on Friday, saying: 'The dollar can not block our path.

Erdogan, elected in June to a new executive presidency, enjoys the support of many Turks even though food, rent and fuel prices have all surged.

"If they have their dollar, we have the people, we have Allah", he said, as the lira continued to fall. Unlike many other news organizations, we have not put up a paywall. It is obvious how it will be done: "since the final decision-maker of all policies in the new regime is the president, the responsibility of regaining confidence is on his shoulders".

Trump's tweet caused a further drop in the Turkish currency, which is now down 13 percent on the day.

Investors are turning against emerging markets as the rising prospect of a prolonged trade war compounds a backdrop characterised by a more hawkish Federal Reserve and European Central Bank.

The dollar index, which measures the greenback's strength against a group of six major currencies, breached the 96 level, taking it to its highest level since July 2017. He is a self described "enemy of interest rates" and wants banks to lend cheap credit to fuel growth, something experts are anxious could seriously affect the economy. The move came as Washington was in a diplomatic standoff with Ankara over Turkey's detention of an evangelical pastor from North Carolina.

High level meetings in Washington between USA and Turkish officials over a detained American pastor ended this week without an apparent resolution.

An immediate "aggressive interest rate hike" was also needed, Mr Grier said, with something of the order of 1,000 basis points as seen in Argentina this year.

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