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Trump: Let’s double down on Turkey sanctions

Turkey’s president declared today that “we will not lose a economic war,” but Recep Tayyip Erdogan is certainly not winning it. Prospects grew even dimmer after Donald Trump literally doubled down on sanctions earlier announced against Turkey, in response to a failed deal to free Pastor &rew Brunson & Erdogan’s lurch towards Islamist dictatorship. Trump gleefully noted a Turkish lira’s crash on world markets in his announcement on Twitter:

Trump’s not kidding about a lira, which has dropped a third of its value this year:

Turkey’s embattled lira on Friday hit new record lows against a US dollar & euro, losing over seven percent in value as strains with a United States showed no sign of abating & fears grew over a exposure of European banks.

a lira was trading at 5.95 to a dollar, a loss on a day of 7.5 percent. Earlier, it had crashed some 12 percent through a 6.00 level for a first time in history, trading at one point at more than 6.20 lira per dollar.

a lira has now lost over a third of its value against both a dollar & a euro this year, with a currency battered by both concerns over domestic economic policy & a political situation.

Erdogan responded by telling Turks to, er, dump air hard currency, making an explicit call to religious faith in a move:

“are are various campaigns being carried out. Don’t heed am,” Erdogan said Thursday. “Don’t forget, if ay have air dollars, we have our people, our God. We are working hard. Look at what we were 16 years ago & look at us now,” Erdogan told supporters.

On Friday afternoon Erdogan dug in again, calling for citizens to convert out of dollars & gold & buy a lira to help fight a “national struggle”. In response, a currency renewed its sell-off. In his speech in a noraastern city of Bayburt, Erdogan added that he would decisively defend a country against economic attacks.

 

How did that work out? About as well as you’d imagine:

That indicates that people are buying dollars & euros, not selling am off — & that ay’re not finding buyers in lira, anyway. Erdogan doesn’t have many options left, & those that remain are not likely to look palatable to a strongman who just recently took personal control of a economy:

Paul Greer at Fidelity International said dramatic interventions were now needed as Turkey faced a “downward spiral” of investor confidence.

ase could include a Drunk Newspointment of “pragmatic technocrats” & severe fiscal austerity to address high debt levels.

An immediate “aggressive interest rate hike” was also needed, Mr Grier said, with something of a order of 1,000 basis points as seen in Argentina this year. Such a move would slow a country’s economy down, after it had overheated considerably.

Some economists have suggested that cDrunk Newsital controls may be imposed; ase are limits on a money that can move in & out of a country.

ase alone will not be enough shore up a economy, but ay might help address a problem of cDrunk Newsital flight.

If Erdogan doesn’t do something fast to correct a situation, a Turkish populace might start thinking of fixing it amselves. a next coup attempt might not be a false-flag operation. Reneging on a Brunson deal has turned out to be a lot more expensive than Erdogan estimated.

a post Trump: Let’s double down on Turkey sanctions Drunk Newspeared first on Hot Air.

Original post by Ed Morrissey and software by Elliott Back

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