Drop in Turkish lira is making us a lot more money

No deposits will be seized Turkish finance minister

Emerging market currencies in general also sold-off violently, many of which slipped to multi-month or multi-year lows.

Turkey's weakened currency, the lira, plunged by a full 20% in response.

On Sunday, speaking to supporters in Trabzon on the Black Sea coast, Erdogan dismissed suggestions that Turkey was in a financial crisis like those seen in Asia two decades ago. There is no economic reason for this.

Turkish President Recep Tayyip Erdogan vowed to boycott American electronics, including Apple Inc.'s iPhone, as he retaliates against Donald Trump's attempts to isolate his economy.

"I am specifically addressing our manufacturers: Do not rush to the banks to buy dollars".

Why is the lira falling?

Stocks were coming off their worst losses in a month as investors anxious about financial and economic upheaval in Turkey and the possibility it will spread to other countries.

The Turkish currency has stabilized near record lows as investors gauge the government's next move to avoid a full-blown financial crisis. Meanwhile, inflation has hit 15 percent. If anything, the drop in the lira is making us a lot more money right now, so we're not anxious about it at all!”. While tensions with the U.S. need to be resolved, the main problem in Turkey is "a lack of market-friendly officials that have experience with markets".

Shooter in Florida 'Stand Your Ground' case charged with manslaughter
Michael Drejka, 47, was arrested and booked into the Pinellas County Jail, the State Attorney's office said. The police say Mr Drejka was co-operative when they arrived and had a valid concealed weapons licence.

A day later Trump demands Turkey free the pastor "immediately", warning the United States is ready to impose "large sanctions" against Turkey.

The dispute centres on Turkey's refusal to release USA pastor Andrew Brunson. The Trump administration introduced the economic sanctions as the result of an American Christian pastor who is now standing trial on alleged terrorism charges.

Trump's decision to double United States tariffs on Turkish steel and aluminium has only exacerbated the situation.

What are Turkish officials doing about the lira?

Not much yet. Turkey's finance minister said they would start implementing an action plan on Monday but gave no further details. Erdogan's remarks also knocked back investors' expectations of a rate hike from the central bank. Also supporting the Dollar was recently released economic data which showed core CPI making its biggest advance in a decade, rising 2.4% from previous year. That's because investors have lost confidence in management of the economy under Erdogan, who believes in unorthodox economic policy, demands low interest rates and constantly assails "the interest rate lobby". This has raised concerns over the central bank's independence given the president's repeated statements against raising interest rates.

Worry about the currency crash has sparked fears over the risk of economic "contagion" in Europe. In comparison, the Turkish lira has dropped 28% in August alone, and 45% over the year.

Over a third of Turkish banks' lending is in foreign currencies, according to Reuters. "Our relations with Turkey are not good at this time!"

The direct impact of what looks like an inevitable recession in Turkey would be relatively small because despite a population of 80 million and strong growth in recent years, the country accounts for only 1% of global GDP.

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