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Erdogan defiance amidst Lira crisis

August 15, 2018

Turkey’s President has accused foreign powers of waging a trade war, as the country’s currency goes into freefall.

According to The Guardian, Recep Tayyip Erdogan alleged that Turkey was being subjected to an economic war, as he announced new trade measures aimed at reducing the nation’s reliance on both the Dollar, and US markets.

Speaking to party officials from the ruling AKP in Trabzon on Sunday, Erdogan declared: “We will respond to those, who declared trade war on the entire world and included Turkey in it, by steering toward new alliances, new markets.”

The Lira’s decline, falling 20 percent to record lows last week, follows the imposition of new tariffs on the country’s steel exports by the United States and Donald Trump, who is still waging a similar trade war with China.

The Lira’s woes are exacerbated by increasing concerns over the $350 billion (€309.3 billion) foreign debt held by Turkish banks and companies, “and their ability to finance it as the currency weakens and inflation soars.” Turkish consumers are currently facing rapidly rising food, fuel, and medicine prices.

Turkish finance minister Berat Albayrak, the son-in-law of the President, has said that a plan has been prepared for banks and the real economy sector, which includes SMBs, who are most affected by the tumbling currency value.

“We will be taking the necessary steps with our banks and banking watchdog in a speedy manner,” Albayrak said.

According to The Guardian, “the Turkish central bank has offered no indication that it will raise interest rates to combat high inflation or other measures to stem the drop in the value of the currency.”

This silence has reportedly heightened fears of Erdogan’s influence over the institution, and the country’s monetary policy generally.

The Guardian reports that “Erdogan opposes raising interest rates to combat high inflation, a measure many analysts have urged,” adding that the allegedly nepotistic appointment of Albayrak “has also heightened concerns that he will exert greater influence in fiscal strategy.”

The official line from ministers is that Turkey’s crisis is a result of foreign attack, from the USA and other agents, with Turks being urged to rally to defend their president and government from aggression abroad.

It is the latest rung on the ladder of hostility between the Eurasian nation and the United States, with tensions rising particularly over the ongoing Syrian civil war, the various militia groups operating in the region as a result of the conflict, and the perennial issue of Kurdistan.

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