USA urges solution to pastor case in Turkey

Traders work on the floor of the NYSE in New York

Traders work on the floor of the New York Stock Exchange in New York U.S

The Turkish central bank sought to tamp down concerns Monday with a pledge to provide as much financing as necessary to salvage the country's economy.

Relations between Washington and Ankara have taken a turn for the worse amid bitter dispute over the detention in Turkey of an American evangelical pastor on terrorism charges.

But analysts argue that the malaise of Turkey - a high-growth economy with widely-acknowledged potential and importance - goes far deeper to policy and imbalances that have been allowed to persist for too long.

David Kohl, the chief currency strategist at Julius Baer said the Turkish president's comments in May, calling interest rates "evil", suggest there are "no intentions to win market confidence in order to stabilise the weakening currency".

Turkish actions against US economic interests will be largely symbolic.

Lavrov says that Washington's policies will undermine the dollar's position as the global reserve currency of choice.

Turkey's lira has bled value against the dollar, leaving the country under President Recep Tayyip Erdogan facing its most serious economic challenge since a financial crisis in 2001.

A bigger danger is that Turkey's crisis will spill over into other emerging market economies and there were signs on Monday that other countries seen as vulnerable were coming under speculative attack.

State-run Anadolu Agency says the lawyer on Tuesday also appealed to a court to lift a travel ban imposed on Pastor Andrew Brunson.

The tensions spooked investors already anxious by the fallout of a row between Turkey and its North Atlantic Treaty Organisation ally, with the lira falling sharply last week.

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Last Friday, President Donald Trump doubled tariffs on aluminum and steel imports from Turkey. Although he was released to home detention, he faces a prison sentence of up to 35 years if he is convicted at the end of his ongoing trial. In particular, the report flags that Spain's BBVA, Italy's UniCredit and France's BNP Paribas, all of which have significant operations in Turkey, are especially exposed.

'They don't hesitate to use the economy as a weapon, ' he said.

It is not clear if this comes after Mr Erdogan's pressure.

Mr. Erdogan last week renewed a call for Turks to convert their dollars into the Turkish lira, to help underwite the currency's value.

The fall out has showed no signs of abating as United States president Donald Trump approved doubling tariffs on Turkish steel and aluminum while Mr Erdogan has vowed to retaliate. The central bank, guided by the government, refused to raise interest rates to curb inflation and the drop in the Turkish Lira.

The lira stood at 6.89 against the USA dollar at 1511 GMT - after Erdogan's comments - up from a record low of 7.24 to the dollar reached in early Monday trade. Not only would this help contain inflation but it would also help support the lira.

"W$3 e're probably likely to see more of these crisis in emerging economies as the US Federal Reserve raises interest rates, making life for all dollar-exposed economies much more hard", economic writer Ed Conway said on Twitter.

The lira plunged to a fresh record low of 7.24 against the dollar during in Asia Pacific trade, where markets were opening for Monday morning.

President of Turkey Recep Tayyip Erdogan addresses during a luncheon for participants of 10th Ambassadors' Conference at Presidential Complex in Ankara, Turkey on August 13, 2018.

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