Turkish lira continues to nosedive, amid 'economic war' with the

Greek lieutenant Aggelos Mitretodis and noncommissioned officer Dimitros Kouklatzis were arrested in Turkey

Q: Why is Turkey's currency so weak?

The Turkish lira TRYTOM=D3 has always been falling on worries about Erdogan's influence over monetary policy and worsening relations with the United States.

The euro zone bank sell-off was also exacerbated by a report in the Financial Times that the European Central Bank is increasingly concerned about some lenders, particularly BBVA of Spain, UniCredit of Italy and BNP Paribas of France as they have some of the largest operations in Turkey among euro zone banks.

Canada's main stock index also fell on Friday.

The lira, which had traded at 4 to the dollar as late as April, was being quoted at more than 7 to the dollar at one point Friday before rebounding to about 6.4.

Trump said he had authorized higher tariffs on imports from Turkey, imposing a 20 percent duty on aluminum and 50 percent one on steel.

This prompted yet another tweet from President Trump, this time announcing the actual authorization of the doubling of tariffs on steel and aluminum for Turkey. Our relations with Turkey are not good at this time!'

Turkey exported $1.04 billion (€0.91 billion) worth of steel and $60 billion worth of aluminum to the USA in 2017, according to the Hurriyet newspaper.

However, the White House later clarified that Trump's announcement "authorized the preparation of documents" to raise the tariffs.

A Turkish delegation visited Washington for talks this week but left with no signs of a breakthrough.

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

His characteristic defiance has further unnerved investors.

Erdogan's "tight grip" on the central bank and the fact "higher interest rates do no fit with Turkey's economic growth strategy" meant that the central bank has kept interest rates on hold, Nora Neuteboom, economist at ABN Amro, told AFP. "If there are euros, take these out ... immediately give these to the banks and convert to Turkish lira and by doing this, we fight this war of independence and the future".

'This is a national, domestic battle.

"Some countries have engaged in behaviour that protects coup plotters and knows no laws or justice", he said. He added that the country will continue to enjoy good economic relations with several major nations.

Brunson, an evangelical Presbyterian from North Carolina, was jailed for allegedly supporting a group that Turkey blames for the failed coup. He denies the charges.

Erdogan enjoys the support of many Turks even though rents and food and fuel prices have all surged.

Some economists were unimpressed by the government's handling of the crisis.

"Confidence needs to be regained".

Turkish President Recep Tayyip Erdogan has accused the USA of trying to "bring Turkey to its knees through threats over a pastor".

The ZAR appears to have plummeted just as the Turkish Lira took another leg lower around about the time U.S. markets opened for trade. As the currency drops, Turkish companies and households with debt in foreign currencies see their debts expand. Furthermore, consternation in the U.S. Congress has led to a nascent bill that could limit Turkey's ability to obtain loans from any U.S. -based financial institutions.

Turkey's treasury and finance minister Berat Albayrak - who is Mr Erdogan's son-in-law - tried to ease investor concerns during a conference, saying the government would safeguard the independence of the central bank.

This did nothing to revive the lira.

Trump announced the action Friday on Twitter. "Albayrak's plan was uninspiring at best".

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