Trump administration imposed financial sanctions on Turkey. Turkish lira hit a record low following the rapid depreciation of the Russian ruble.
Erdogan's tightened grip on power caused a significant fall in the lira’s exchange rate. Trump’s decision to authorize a doubling of duties on aluminum and steel imported from Turkey, making them 20 percent and 50 percent respectively, was enough to collapse the currency. His Twitter post just sped up the lira's depreciation. “I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Our relations with Turkey are not good at this time!” the American president tweeted. Turkish President Recep Tayyip Erdogan’s response was almost proportionate. As measures of active economic opposition, Erdogan assured people with an aII-too-familiar mantra that “the dollar cannot block our path.” Besides, he urged citizens to show financial patriotism and go exchange dollars for liras!
However, his dignified response cannot influence the dollar exchange rate, as well as the US economy. And do not forget, while the financial authorities of Turkey in an operative manner puzzle over how to fix the situation, Donald Trump will need only one tweet to not only devalue the lira but also to provoke a mass exodus of foreign investors from Turkey.