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Turkey's Erdogan says lira weakness a plot, can not be explained by logic

Turkey's Erdogan says lira weakness a plot, can not be explained by logic

Trump also threatened additional "large sanctions" against Turkey, a North Atlantic Treaty Organisation ally, for Brunson's detention.

On Aug. 10, the lira, which had already lost more than a quarter of its value against foreign currencies in 2018, tumbled to a fresh low of more than 6.6 per dollar following U.S. President Donald Trump's decision to double tariffs on aluminum and steel imports from Turkey to 20 percent and 50 percent, respectively.

"The United States should know that the only result such sanctinos and pressure will bring... will be harming our relationship as allies", the Turkish foreign ministry said in a statement.

"The aim of the operation is to make Turkey surrender in all areas, from finance to politics", Mr Erdogan said. "We've stood with neighbors before, and will again now". "With God's permission we will overcome this", he added.

The United States has increasingly used economic sanctions against foes such as Iran or North Korea but it is highly unusual for an administration to impose import tariffs over political or judicial issues with other countries.

"Relations with countries who behave like this have reached a point beyond salvaging", said Erdogan, who warned of "economic war".

"Some close the doors and some others open new ones", added Erdogan, who has built closer ties over the last years with countries from Latin America, Africa to Asia.

He appeared to indicate that the entire alliance between Turkey - which joined North Atlantic Treaty Organisation in 1952 with strong American backing - and Washington was at stake.

"We might as well say goodbye to those who sacrifice their strategic partnership with a country of 81 million and an ally of over 50 years for some terrorist groups", Erdoğan said, referring to Washington's support for the PKK-affiliated groups in Syria, and its extrajudicial demands to release pastor Brunson, who was detained in October 7, 2016, for his links to the Gülenist Terror Group (FETÖ) and the PKK.

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Mr Erdogan has linked Gulen's fate to that of American Christian pastor Andrew Brunson, who is on trial in Turkey on terrorism charges for allegedly supporting a group that Ankara blames for the failed coup.

The sides held talks in Washington this week but failed to resolve the spat.

Ankara and Washington also disagree over their military interventions in the Syria war, Turkey's plan to buy missile defense systems from Russian Federation and the U.S. conviction of a Turkish state bank executive on sanctions-busting charges in January.

The currency's drop - 41 percent so far this year - is a gauge of fear over a country coming to terms with years of high debt, global concern over Erdogan's push to amass power, and a souring in relations with allies like the U.S.

Analysts say that while Washington's sanctions against Ankara sparked the immediate crisis, Turkey's economy has been risking trouble for a while due to high inflation and the weak lira.

The central bank has over the last weeks defied calls from markets for rate hikes to combat these problems, raising fears of interference from Mr Erdogan, who has repeatedly called for low interest rates.

Erdogan had on Saturday described interest rates as a "tool of exploitation", in remarks that may not be warmly welcomed by the markets. He urged Washington to give up the misguided notion that bilateral relations could be "asymmetrical" and realize that Turkey had alternatives "before it is too late".

Turkish officials insist the outcome of Brunson's case exclusively relies on the judiciary, a claim the U.S. has refused to buy in the light of Erdogan's earlier suggestions to swap him with Turkish opposition exiles residing in the US.

"You arrest my Halkbank general deputy director? What happened? Immediately, we have imposed the same sanctions on their ministers", Mr. Erdogan said.