How serious is Turkey's lira crisis and what are the implications?

US stocks open higher as Turkish lira rebounds - Xinhua | English.news.cn

Erdogan said his country will boycott USA -made electronic goods amid a diplomatic spat that has helped trigger a Turkish currency crisis. In addition, the USA has placed sanctions on two Turkish ministers over the arrest of an American pastor who is charged with having links to terrorism.

The drop of the Turkish lira is not all bad, Riza from Turkish exporting company Hatipoglu grinningly told FreshPlaza: “We sell our produce for euros and U.S. dollars, so this drop doesnt really affect us in a negative way.

"If (the United States) have the iPhone, there's Samsung on the other side", he said, referring to U.S. giant Apple's iconic phone and the top South Korean brand.

"When the dollar turns into a tool of political punishment, we will continue to take steps to protect the Turkish lira even more strongly in global trade", Albayrak said.

Shortly after, USA sanctions citing Brunson's detention created a flawless storm of economic conditions in Turkey that's seen the lira down more than 45% against the dollar so far this year, despite a slight rally on Monday.

Despite the harsh talk against Apple, The New York Times reports that Erdogan and his officials are frequently seen with iPhones in their hands.

These import taxes came on top of 10% additional tariffs on aluminum and 25% on steel from all countries, in a bid by Trump to protect the United States steel industry and please voters in America's industrial heartland.

"We as Turkish Airlines are taking our place alongside our state and people", senior vice president for media relations Yahya Ustun wrote on Twitter with the hashtag #ABDyeReklamVerme, meaning "don't give advertisements to the USA".

"We expect a $32bn foreign currency inflow", Firuz Baglikaya, head of the Association of Turkish Travel Agencies, told the state-run Anadolu news agency.

The United States is warning more economic pressures may be in store for Turkey if it refuses to release a jailed American pastor, a White House official said on Tuesday, in a dispute that has further strained relations between the North Atlantic Treaty Organisation allies.

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'They don't hesitate to use the economy as a weapon, ' he said. 'What do you want to do? He added that USA electronics would have sanctions placed on them.

Albayrak also said fighting inflation and current account deficit are main priorities to establish a "much stronger Turkish economy".

Andrew Brunson is an American pastor who has been detained in Turkey for nearly two years since October 7, 2016.

The dispute between the North Atlantic Treaty Organisation allies - brought to a new intensity by Turkey's holding of an American pastor for two years - has raised questions over the future of their partnership and fanned fears of a looming economic crisis in Turkey. The lira shed another 8% to below 7 per dollar after a double-digit percentage slide Friday.

The lira perked up on Tuesday after Turkey's central bank unveiled measures to boost liquidity.

"A lot of the goods we sell are imported and we already have problems with the increase in the prices because of the lira's value against the dollar and euro", he said.

The White House on Monday said U.S. national security adviser John Bolton met Turkey's ambassador to the United States to discuss the detention of Brunson.

Treasury and Finance Minister Berat Albayrak, Erdogan's son-in-law, will speak with about 1,000 foreign investors on Thursday via a teleconference, the private NTV broadcaster said.

His comments have so far failed to quell a crisis that economists say is largely self-inflicted, owing to an overheated economy and the debt exposure of Turkey's companies and banks.

Why is Erdogan mad at the United States?

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