Erdogan calls for national support as lira plunges and US announces new tariffs

Global Business

Turkey’s President Tayyip Erdogan said his country’s economy is under attack. His government has announced a new economic model to boost confidence, as the lira currency continues to free-fall.

This all comes amid an announcement by U.S. President Donald Trump to double tariffs on two critical industries and a depreciating lira currency. CGTN’s Michal Bardavid has details.

2018 has been a difficult year for Turkey’s economy. The lira has been declining for months, becoming one of the worst performing currencies this year. It has lost about 40 percent of its value since January.

Turkish President Tayyip Erdogan tried to reassure his followers, telling them “God is with them” and called for national support.

“If there is anyone who has dollars, euros or gold under their pillows, they should go exchange it for liras at our banks. This is a national, domestic battle. This will be my people’s response to those who have waged an economic war against us.” said President Erdogan.

Meanwhile, Erdogan’s son-in-law, the newly appointed Turkish Treasury and Finance Minister, Berat Albayrak, announced a new economic model on Friday. Speaking to an audience of businesspeople, he emphasized that the Turkish Central Bank would be independent under his leadership.

“The independence of this specific monetary policy must in principle continue going forward. It must always be this way. We must continue on this path based on this principle. Because when you look at the whole framework, the central bank’s independence is critically fundamental regarding Turkey, our economy.” said Albayrak.

Many foreign investors are concerned Erdogan will interfere in the country’s monetary policies under a system that gives him new executive powers. Erdogan describes interest rates as “the mother and father of all evil” and frequently calls for low interest rates, something that many economists disagree with.

In the newly-announced economic model, Albayrak said steps would be taken to secure economic growth of three to four percent in 2019 and bring down inflation rates.  Yet, while Turkish officials were making statements to boost confidence, U.S. President Donald Trump announced he would be doubling the rate of tariffs on steel and aluminum imports. He said in a Tweet, “Our relations with Turkey are not good at this time.”

The Turkish Lira had already tumbled during the week after talks between U.S. and Turkish officials regarding the detention of an American pastor ended with no resolution.

While relations with the U.S. are going downhill, Turkish ties with Russia appear strong; On Friday, Erdogan held a phone call with Russian President Vladimir Putin focusing on bilateral cooperation and regional issues. Russian Foreign Minister Sergey Lavrov is expected to visit Ankara next week. 

Aykan Erdemir on Turkey’s economic crisis

“The worst economic crisis in Turkey’s history.” That’s the opinion of former Turkish Parliament member Aykan Erdemir, now a senior fellow at the Foundation for Defense of Democracies. CGTN’s Mike Walter asked him what’s behind President Trump’s latest broadside against Turkey.

Doga Ulas Eralp on Turkey’s economic outlook as the lira free-falls and U.S. tariffs on metal double

CGTN’s Rachelle Akuffo spoke with Doga Ulas Eralp about Turkey’s economic outlook as the lira free-falls and U.S. tariffs on metal double