Trump doubles tariffs on Turkey

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In his Twitter message, the US president noted specifically how the Turkish lira was sliding "rapidly downward against our very strong Dollar".

More broadly, concerns over the sickly Turkish economy's wider impact were intensified Friday by a report in the Financial Times that the supervisory wing of the European Central Bank had began to look more closely at eurozone lenders' exposure to the country.

Donald Trump has today announced massive increases to tariffs against Turkey as its currency the lira continues to plummet.

Turkish President Recep Tayyip Erdogan is appealing for calm as the country's currency plunges, urging people to change foreign money into local lira.

Obviously a real Turkish crisis would have knock-on effects, though Berenberg sees Europe's exposure to Turkish banks as being too small to cause much harm.

The unorthodox approach of the president, who has dominated Turkish politics for more than 15 years, has unnerved investors who have voiced concerns over Turkey's authoritarian trajectory under Erdogan. "Don't heed them", Erdogan said Thursday.

"If there is anyone who has dollars or gold under their pillows, they should go exchange it for liras at our banks".

The currency's drop - 40 percent so far this year - has become a gauge of fear over a country facing the fallout of years of debt-fueled growth, worldwide concern over President Recep Tayyip Erdogan's push to amass power, and a souring in relations with allies like the U.S.

"The dollar can not block our path".

Last week, Mr Erdogan urged Turks to exchange gold and other currency for lira in a effort to boost its value. Both banks have said a 10 percent fall in the Lira could shave 2 basis points off their capital adequacy ratio. In response, the currency renewed its sell-off.

Investors are turning against emerging markets as the rising prospect of a prolonged trade war compounds a backdrop characterised by a more hawkish Federal Reserve and European Central Bank.

Large sums of borrowing in foreign currencies make Turkey especially vulnerable to a falling domestic currency because it becomes more expensive to pay off those debts. The currency has shed 22pc of its value since late July. "I would say we would define progress as Pastor Brunson being brought home", Nauert said.

High-level meetings in Washington between US and Turkish officials over Brunson ended this week, apparently without a resolution. Erdogan has been putting pressure on the central bank to not raise interest rates in order to keep fueling economic growth. While there was no statement from the Turkish side, US State Department spokesperson Heather Nauert said wide-ranging conversations had been held.