Trump doubles tariffs on Turkey, stoking jitters

The Latest: Experts see limited risk to Europe from Turkey

Erdogan warns of campaign against Turkey as lira plummets

In this file photo taken on July 11, 2018, US President Donald Trump (L) speaks with Turkey's President Recep Tayyip Erdogan (R) as they arrive for a North Atlantic Treaty Organisation summit at North Atlantic Treaty Organisation headquarters in Brussels.

Zafer Tulus, whose family has owned a butcher shop for more than 200 years, has been forced to close down the business. Germany's DAX index slid 2 percent.

Shares of Turkish steelmakers Kardemir and Erdemir plunged as much as eight percent and 9.9 percent respectively after Trump's tweet.

The Turkish lira plunged on Friday, raising questions about the country's financial stability, as investors anxious about the president's unorthodox economic policies and a dispute with the United States that has led to sanctions.

Turkey's currency, the Lira, plunged on Friday sparking concerns about the country's financial stability as investors anxious about Turkey's president's economic policies and a dispute with the U.S.

The NATO allies are at odds over the detention in Turkey of U.S. evangelical pastor Andrew Brunson on terrorism charges. He is facing up to 35 years in prison if found guilty of supporting the unsuccessful coup to overthrow President Recep Tayyip Erdogan in 2016.

The mere fact that the US would impose sanctions on Turkey - a stalwart North Atlantic Treaty Organisation ally for decades during the Cold War - has increased uncertainty about the future in Turkey. The country is not a member of the European Union but is economically linked to it.

After inconclusive talks this week on solving the spat, Mr Trump took advantage of Turkey's turmoil to turn the screws on the country.

Presenting the government's new economic model, Albayrak said the next steps of rebalancing would entail lowering the current account deficit and improving trust.

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"The only way to correct these policy mistakes is to really make some concrete changes on the fiscal and monetary side". As the lira falls in value, the debt becomes harder to pay.

The 19-country currency fell 0.7 percent to trade at $1.1450 in morning trading in Europe. The future contract for the Dow Jones industrial average was down 0.4 per cent and the contract for the S&P 500 lost 0.5 per cent.

Turkey's economy is regarded as fragile because of its high debt, which the global Monetary Fund estimates is 50 percent of its gross domestic product.

Investors piled into "safe" government debt, with German yields hitting three-week lows and the yield on the benchmark US 10-year Treasury note falling to 2.8750 percent as investors sought its safety. Going in the opposite direction was the safe haven Japanese yen, which hit a one-month high against the dollar. The currency has shed 22pc of its value since late July.

Adding to emerging market currency woes was the Russian rouble, weakened to 67.12 to the dollar.

The rand was at 14.0714 per USA dollar by 4:09 Johannesburg, the weakest on a closing basis since Nov 24, when S&P lowered South Africa's local-currency rating one step to a notch below investment grade.

Turkey's energy minister announced on August 8 that Turkey will keep buying liquid natural gas from Iran in violation of USA sanctions.

In commodities, USA crude oil fell 0.5 percent to US$66.51 a barrel, while Brent crude was 0.4 percent lower at US$71.77 per barrel.

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