TROUBLE IN TURKEY: Currency PLUNGES 20% After Trump DOUBLES Metal Tariff

Turkey to reveal 'new economic model' on Friday

This comes as the Trump administration plans to slap a 20-percent tariff on aluminum and a 50-percent tariff on steel.

This is double the level the president imposed on a range of countries earlier this year, including European Union member states.

But analysts say that while there may be losses at banks, Turkey's economic problems do not pose a big threat to Europe or other big economies, like the United States.

Last week, the U.S.

Earlier on Friday the lira plunged as much as 14 percent on as worries about Erdogan's influence over monetary policy and worsening US relations snowballed into a market panic that also hit shares of European banks.

The currency has fallen more than 35 percent this year after losing almost a quarter of its value in 2017.

The sudden announcement turned a run on the Turkish lira into a rout; it crashed more than 18 percent to a new record low against the dollar. Lindsey GrahamLindsey Olin GrahamGOP lawmaker: Every white suburban district in the country will be a swing district this year The Hill's Morning Report - Trump to GOP: I will carry you GOP senator: "Real likelihood" Dems win the House "by 10 or 12 more seats than they need" MORE (R-S.C.) tweeted Friday.

The lira's plunge is one of the most serious economic crises that Erdogan has faced since coming to power in 2003 in the wake of a financial crisis in 2001 that brought the economy to near meltdown. The weakened currency's value has helped increase inflation and anxious global investors.

Meanwhile, investors are anxious about the economic policies of President Recep Tayyip Erdogan, who won a new term in office in June with sweeping new powers.

Speaking to supporters in the Black Sea province of Rize late on Thursday, Erdogan brushed off concerns over the currency as campaigns against Turkey.

Turkey's benchmark one-week repo rate is now 17.75%.

His characteristic defiance has further unnerved investors. With central banks holding down interest rates, currency traders are the new economic enforcers, as Friday's volatile markets showed.

President Erdogan's famed reluctance to tolerate higher interest rates and the timidity of the CBRT in going against him has left bondholders with dwindling value due to persistent inflation hammering their expected "real" returns.

In a tweet, Mr Trump said the currency was weak against "our very strong dollar", adding that "US relations with Turkey are not good at this time".

The lira has been under sustained pressure on foreign exchanges, dropping by nearly 50% against the dollar in the past 12 months.

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On Friday, the euro sagged to a 13-month low against the dollar, down 0.7 per cent to $1.1450, after the Financial Times reported that the European Central Bank was anxious about possible losses at eurozone banks operating in Turkey.

Overnight it had retreated to its lowest since November 2016 on threats of new US sanctions, weakening beyond the psychologically important 65-per-dollar threshold. Arrested in 2016, he faces terror and espionage charges.

"We will not lose the economic war", he said.

Far worse than that, though, is this has also sent Turkey's currency on a downward spiral that threatens to destroy its entire economy. These include places "from Iran, to Russian Federation, to China and some European countries", he said.

A statement from the Kremlin said the two leaders discussed economic and trade ties.

The Associated Press contributed to this article. Mario Ritter was the editor.

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