BREAKING NEWS West Lafayette issues mandatory face mask executive order Full Story
STREAMING NOW: Watch Now

Real Turks feel the squeeze after Trump's tweets and tariffs

At the Ayaklı borsa -- or standing currency exchange in old Istanbul -- seasoned traders still ply their tr...

Posted: Aug 22, 2018 2:33 PM
Updated: Aug 22, 2018 2:33 PM

At the Ayaklı borsa -- or standing currency exchange in old Istanbul -- seasoned traders still ply their trade on their feet as they have for centuries. They say they have not seen such volatility since 2001, when Turkey faced its last major currency crisis.

Those at Ayaklı borsa described August 11 as "Black Friday," after a tweet by US President Donald Trump triggered a new round of tariffs on Turkish aluminum and steel, which sent the Turkish lira reeling. From their vantage point at the standing exchange, the lira's battle is far from over.

Business, economy and trade

Continents and regions

Currencies

Donald Trump

Economic policy

Economy and economic indicators

Government and public administration

Government bodies and offices

Middle East

Middle East and North Africa

Monetary policy

Money, banknotes and coins

Political Figures - Intl

Political Figures - US

Recep Tayyip Erdogan

Turkey

US federal government

White House

Banking, finance and investments

Exchange rates

Financial markets and investing

Foreign-exchange markets

International trade

International trade law

Tariffs and customs

Trade and development

Trade regulation and policy

"As long as the tension with America continues to be high and Turkey has limited cash reserves, the dollar is open to rise," veteran currency trader Adnan Kapikaya told CNN in the midst of the noisy calls to place orders.

Kapikaya is referring to the high-profile spat between Trump and Turkey's long-serving leader, Recep Tayyip Erdogan. The lira has been caught in the crossfire.

Conflict over pastor

Trump has turned up the heat seeking the release of American pastor Andrew Brunson, who has been held in Turkey on espionage charges since 2016.

With the pressure he has put on Turkey, President Trump has placed that country in the pole position for what is a nasty rush out of emerging-market currencies and into the dollar as the US Federal Reserve winds down nearly a decade of historically low interest rates.

Over breakfast in a café in central Istanbul, bank employee Mehtap Gunal said the near 40% decline in the lira has been difficult to digest as prices for basic foodstuffs continue to rise.

"This has a shock impact on us. We feel it in our kitchens, cafés and on our salaries," said Gunal. "To see our salary losing its value is scary."

With a good instinct for the mood on the street, Turkey's scrappy President has tried to counterpunch each of Trump's moves. One day he threatened a boycott of US electronics; the next, he doubled tariffs on a long list of American goods -- from cars to cosmetics.

Friends in Russia and Qatar

He also moved into higher gear to shield Turks from the Trump offensive by announcing emergency measures to limit Turkish companies from swapping liras for dollars. Erdogan also went out of his way to send a message to Washington that Turkey has friends.

Russian Foreign Minister Sergei Lavrov visited Ankara, followed a day later by the young Emir of Qatar, Sheikh Tamim bin Hamad Al Thani, who put forth a $15 billion cash injection when Turkey needed it most.

The all-hands-on-deck approach worked to slow down panic selling of the lira, but Turkey's long-term economic problems won't vanish overnight after years of prolific spending.

In Taksim Square, a grand mosque taking final shape serves as an example of Erdogan's construction-driven growth strategy during his 15 years in power.

Zumrut Imamoglu, the chief economist of Turkey's powerful business association TUSIAD, said local companies and banks are now suffocating under a mountain of foreign debt. After a rapid descent in the currency, the cost of repayment is soaring.

Funding gap

"Corporates and the financial sector and if you include the government debt, they need to find $180 billion of funding for the next year and international reserves at the central bank stand around $100 billion. So, there is a gap and that is what investors have been focusing on," Imamoglu said.

Imamoglu is forecasting a quick reversal of fortune from what she said was an overheated 7.4% rate of growth in the first quarter to near recession by the close of the year.

She said Turkey's current account deficit of 5.5%, inflation of nearly 16% and commercial lending rates of 38% make up a toxic economic combination that will implode if Turkey does not turn to the International Monetary Fund for emergency lending, a move Erdogan remains steadfastly against.

Which means over the next year, the livelihood of average Turks and their populist leader will remain closely linked to the tweets of the US President and a rising US dollar.

West Lafayette
Clear
80° wxIcon
Hi: 83° Lo: 58°
Feels Like: 81°
Kokomo
Clear
75° wxIcon
Hi: 80° Lo: 57°
Feels Like: 75°
Rensselaer
Clear
73° wxIcon
Hi: 79° Lo: 56°
Feels Like: 73°
Fowler
Clear
73° wxIcon
Hi: 80° Lo: 58°
Feels Like: 73°
Williamsport
Clear
76° wxIcon
Hi: 82° Lo: 57°
Feels Like: 76°
Crawfordsville
Clear
73° wxIcon
Hi: 82° Lo: 59°
Feels Like: 73°
Frankfort
Scattered Clouds
78° wxIcon
Hi: 81° Lo: 58°
Feels Like: 79°
Delphi
Clear
75° wxIcon
Hi: 81° Lo: 56°
Feels Like: 75°
Monticello
Clear
75° wxIcon
Hi: 81° Lo: 56°
Feels Like: 75°
Logansport
Clear
75° wxIcon
Hi: 81° Lo: 56°
Feels Like: 75°
WLFI Radar
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 51612

Reported Deaths: 2760
CountyConfirmedDeaths
Marion12074693
Lake5650249
Elkhart361860
Allen2952134
St. Joseph214869
Hamilton1708101
Cass16459
Hendricks1466100
Johnson1345118
Porter84038
Tippecanoe7799
Vanderburgh7686
Clark71144
Madison67864
LaPorte62328
Howard60758
Bartholomew60145
Kosciusko5824
Marshall5579
Noble52028
Boone49144
LaGrange48610
Jackson4783
Delaware47552
Hancock46836
Shelby45925
Floyd41444
Monroe34828
Morgan34531
Grant32226
Dubois3096
Montgomery29820
Henry29618
Clinton2903
White27610
Dearborn26523
Warrick26129
Vigo2588
Decatur25632
Lawrence25225
Harrison21822
Greene19632
Miami1942
Jennings17912
Putnam1738
DeKalb1694
Scott1659
Wayne1586
Daviess15117
Perry14910
Steuben1382
Orange13723
Jasper1362
Ripley1347
Franklin1288
Gibson1242
Wabash1163
Carroll1142
Starke1083
Whitley1076
Fayette1067
Newton10110
Huntington942
Jefferson872
Wells821
Randolph804
Fulton731
Jay720
Knox710
Washington681
Pulaski661
Clay645
Rush623
Posey610
Spencer571
Owen521
Benton510
Sullivan501
Adams491
Brown431
Blackford402
Fountain362
Crawford330
Switzerland320
Tipton321
Parke270
Martin260
Ohio230
Vermillion200
Warren151
Union140
Pike120
Unassigned0193

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events