Rand pushes past 14 to dollar as Turkey woes weigh on currency

Rand pushes past 14 to dollar as Turkey woes weigh on currency

The lira's free-fall was the result of a foreign plot and did not reflect Turkey's economic fundamentals, he said.

The lira has been hammered this year, having started January at around 3.70 to the dollar according to Bloomberg data, while it is also sharply down against the euro.

Asian and European markets tumbled and the Turkish lira dived nearly 8 per cent Monday on fears that the economic crisis gripping Turkey could spill over into the global economy. But there are other factors weighing down the lira.

China's blue chip index shed 1.2 per cent, while Hong Kong stocks lost 1.4 per cent as the local dollar fell to the limits of its trading band.

All major European indexes were lower, with Spain and Italy leading losses in the first hour of trade.

Turkish President Tayyip Erdogan told Turks on Friday to sell their gold and USA dollars to support the country's currency which plunged after Trump escalated a feud with the North Atlantic Treaty Organisation ally by doubling tariffs on metals imports. "The President's remarks reflected his administration's determination to maintain the strength of Turkey's economy and served as a warning against the potential outflow of foreign currencies", Altun said.

"If you come at us with your dollars we will try to find other ways to manage our affairs".

Turkey was hit by a financial shockwave this past week as the lira nosedived 14 percent Friday over concerns about the government's economic policies and a trade and diplomatic dispute with the United States.

The currency has lost more than 40 per cent against the dollar this year, largely over worries about President Tayyip Erdogan's influence over the economy, his repeated calls for lower interest rates, and worsening ties with the United States.

Meanwhile, the USA government is using the lira crisis to ramp up pressure on Turkey over its detention of an American pastor.

'I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar!' Trump said in an early morning post on Twitter.

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"On Trump's recent proposal (of talks), our official stance was announced by the president and by us".

Trump added, "Our relations with Turkey are not good at this time!"

The Turkish government has so far struggled to soothe investors' concerns.

In a call with reporters late Sunday, Turkey's finance minister Berat Albayrak said Ankara was planning to roll out an "action plan" on Monday in response to the crisis.

Albayrak, who is Erdogan's son-in-law, didn't specify what the plan would involve.

Turkey vowed Sunday to take measures later to calm market fears sparked by the precipitous plunge in the lira's value as its president accused Washington of spearheading an "underhand plot" against his country. It also said it would slash the amount of funds that banks are required to hold in reserve.

Turkish bank shares fell to their lowest level in dollar terms since November 2003 and their dollar bonds and Turkey's sovereign dollar debt tumbled.

Indonesia's central bank was also intervening in foreign exchange markets on Monday to defend the rupiah.

Meanwhile, Turkey's interior ministry said it will take legal action against hundreds of social media accounts that it says are provoking a drop in the lira.

The "law will be applied to those who release fake news about banks, financial institutions and companies that are open to the public", the Turkish Capital Markets Board said in a statement.

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