Turkish lira dip spells trouble for Asian markets

Turkey Financial Crisis: Stocks at Record Low as Lira Plunges Again

Erdogan calls for boycott of iPhones as he targets American consumer products in retaliation for sanctions

"We are going to boycott USA electronics", Erdogan said.

President Recep Tayyip Erdogan on Tuesday said Turkey would boycott USA electronic goods like the iPhone in retaliation for punitive sanctions from Washington, as the Turkish lira finally clawed back some ground after going into a tailspin over the tensions.

"And we have our own telephone brands", he said in clear-worded remarks. "If they have iPhones, there is Samsung on the other side".

On Monday, Erdogan said that spreading false news about the economy was treason and recent USA actions were a stab in the back against Ankara.

Turkish President Tayyip Erdogan makes a speech during a ceremony marking the second anniversary of the attempted coup at the Presidential Palace in Ankara, Turkey, July 15, 2018.

The currency, the lira, tumbled against the dollar last week when President Trump said he was doubling tariffs on imported Turkish metals to punish Erdogan for refusing to free an American pastor now on trial in Turkey. He also appealed to Turks to exchange dollars and gold for Turkish lira to support the plunging currency.

Andrew Brunson has been at the heart of the ongoing fight after the US sanctioned two top Turkish officials for his continued detention, and Turkey's vow to retaliate, even as its currency plummets.

Turkish government officials are concerned, but the country's tourists have taken advantage of the plunging currency to snap up luxury goods at stores such as Chanel and Louis Vuitton.

Turkey's business lobbies called on Tuesday for a tighter monetary policy to stabilise the lira, and for diplomacy to solve U.S.

In terms of smartphone sales, Turkey isn't a major market for the iPhone. The Turkish lira is down 41% so far this year, with the South African rand down 13%. More than 30 percent of the lira's loss has come since June, when Erdogan took over the office with new sweeping powers.

While the economic penalties would probably do little to dent US economic interests, Erdogan's threat shows that the standoff over the fate of an American pastor held in Turkey isn't going to end soon.

Relations between North Atlantic Treaty Organisation allies Turkey and the United States are at a low point, hurt by a series of issues from diverging interests in Syria, Ankara's plan to buy Russian defence systems and the detention of an American pastor, Andrew Brunson.

He and his lawyers have denied those allegations, and the USA has said the charges aren't credible.

The lira -which plummeted to a record low of 7.24 to the dollar at the week's start, rattling global markets- was slightly weaker at 6.415 after rebounding more than 8 percent overnight. He added that USA electronics would have sanctions placed on them.

"They don't hesitate to use the economy as a weapon", the president commented, referring to the US.

Given that the European banking system isn't as robust as, say, North America's (or ours) - the Europeans didn't respond as decisively to the crisis as other systems - there is some potential for the problems in Turkey to be exported through the EU system, although neither that potential nor its impact on the EU should be overstated.

When Erdogan didn't release the prisoner, merely shifting him to house arrest from jail, Trump struck with sanctions that tanked the lira.

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