Erdogan vows to defy United States 'threats' after currency crash

Turkish delegation returns home after meeting in US

Erdogan promised supporters that Turkey was taking the necessary precautions to protect its economy but added, "The most important thing is breaking the hands firing these weapons".

"You impose sanctions on our Halkbank. and then you expect different treatment from Turkey?" said Erdogan, in a second speech in the same city.

After losing around 18% against the United States dollar on Friday the lira plunged another 10% as Asian currency markets opened on Monday at 7am AEST.

The lira dropped by over 11 percent in value in one day on Friday morning to almost six lira per dollar.

In an interview with the newspaper Hurriyet, Treasury and Finance Minister Berat Albayrak also said the government had no plans to seize foreign currency deposits or convert deposits to the Turkish lira. The ruble has lost 17% of its value against the dollar this year.

Trump is reported to have discussed his case with Turkish President Recep Tayyip Erdogan over the phone. Erdogan has frequently blamed an "interest rate lobby" and Western credit ratings agencies for trying to bring down Turkey's economy.

Erdogan's characteristic defiance in the face of the crisis has further unnerved investors.

Erdogan had on Saturday described interest rates as a "tool of exploitation", in remarks that may not be warmly welcomed by the markets. He claims higher rates lead to higher inflation - the opposite of what standard economic theory says. Negotiations failed to achieve the desired results, prompting the Turkish government to try more aggressive tactics, regardless of their costs to the country's economy and global standing. He urged Turkish citizens to immediately exchange their gold and dollars for lira.

People change money at a currency exchange office in Istanbul, Turkey, Aug. 10, 2018.

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

These tensions and tariffs indicate a deterioration of the U.S.

Sanctions had already been put in place when Turkey continued to trade with Iran regardless of a sanction on the country put in place by the American to halt their nuclear weapons programme.

Turkey has since accused Mr Trump of enforcing "economic terror" on the troubled nation.

Iran's Foreign Minister Mohammad Javad Zarif waded into the mounting row between Turkey and the United States, accusing Washington of an "addiction to sanctions and bullying".

Andrew Craig Brunson, an evangelical pastor from Black Mountain, North Carolina, arrives at his house in Izmir, Turkey, in July.

"Investors are clearly concerned that Turkey's government won't act (or allow the central bank to act) to shore up the currency, and fears are mounting that this could result in a crisis in Turkey's banking sector", wrote William Jackson, chief emerging markets economist for Capital Economics, in a client note.

He added: "Relations with countries who behave like this have reached a point beyond salvaging".

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