Turkish President Tayyip Erdogan on Saturday said it was wrong of the United States to try to bring Turkey into line with threats, a day after President Donald Trump doubled tariffs on Turkish metal imports as the row between the two North Atlantic Treaty Organisation allies deepened. It came as a Turkish delegation returned from the United States, reporting no progress on negotiations involving a US pastor imprisoned in Turkey.
Turkish President Recep Tayyip Erdoğan said Friday that his country was the target of a global financial war and urged citizens to exchange their dollars, euros and gold for lira to bolster the economy.
It fell to a record low this morning, and has now dropped 18 per cent today to 6.5 lira to the dollar, compared with 5.5 lira last night, as a deepening monetary crisis and diplomatic relations with the U.S. deteriorated. "This is a national, domestic battle", he said.
Erdogan on Friday called on Turks to support their struggling currency. Which is why Trump's tweet made it fall even further than Erdogan's reality-starved speech had already made it. Since then, Trump and his vice-president Mike Pence have repeatedly called for his release while Ankara said the decision was up to the courts.
Trump pointed out on Twitter that the lira was not doing well, but one of Erdogan's economic advisers, Yigit Bulut, responded that the sell-off in the lira had caused $300 billion in losses in the USA stock market.
The lira's plunge has featured remarkably little on Turkish television channels and newspapers - most of which after recent ownership changes are loyal to the government - with media focusing instead on recent flooding by the Black Sea.
As the currency weakens, it can make foreign investors pull their money out of Turkish stocks and bonds as their lira investments lose value.
Turkish President Recep Tayyip Erdogan said Turks should not be alarmed by exchange rate movements.
Erdogan said that Washington had always "failed to understand and respect the Turkish people's concerns". "Don't worry", Erdogan told a crowd in the northeastern city of Bayburt.
The central bank raised interest rates to support the lira in an emergency move in May, but it did not tighten at its last meeting.
"If they have their dollar, we have the people, we have Allah, " he said.
"Also completely underestimated is Turkey's capacity to effectively shut down everything that happens in Brussels if they want to, because Brussels works on consensus and nothing, literally nothing happens without consensus", he said.
The defiant tone and war rhetoric only hurt the lira more, before Erdogan's finance chief and son-in-law, Berat Albayrak, tried to ease investor concerns during a conference, saying the government would safeguard the independence of the central bank.
High-level meetings in Washington between USA and Turkish officials over Brunson ended this week, apparently without a resolution.
Turkey has also been hit by U.S. sanctions on Iran, given that half of Turkey's oil imports come from Iran. Erdogan has frequently blamed an "interest rate lobby" and Western credit ratings agencies for trying to bring down Turkey's economy.