Turkey unveils new economic plan

Turkish delegation returns home after meeting in US

Trump raised the stakes on Friday when he said that his administration would double its tariffs on Turkish steel and aluminum.

But Aykan Erdemir, of the Foundation for Defense of Democracies, said Mr Trump's tariffs announcement comes "at the worst possible time for Mr Erdogan" and fits with U.S. strategy to increase pressure on Ankara until Mr Brunson is released.

"As he stated, the president has authorized the preparation of documents to raise tariffs on imports of steel and aluminum from Turkey", White House Deputy Press Secretary Lindsay Walters said.

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

Mr Trump tweeted that he had authorised the doubling of steel and aluminium tariffs "with respect to Turkey".

Ankara's rocky relations with Washington took a further hit as President Donald Trump lobbed fresh salvoes via Twitter against Turkey, plunging the sagging Turkish lira to new lows against the dollar.

The accelerated lira sell-off also deepened concerns about the exposure of banks to Turkey, particularly whether highly indebted companies would be able to pay back loans taken out in dollars and euros after years of overseas borrowing to fund a construction boom under Turkish President Tayyip Erdogan.

After sliding much of the week, the lira plunged more than 15 per cent on Friday against the dollar, setting off a broad decline in global stocks and a drop in currencies of other developing economies.

Erdogan said that there were "various campaigns being carried out" against the country.

The lira hit a record low of 6.24 per dollar on Friday, before recovering to 5.92 - still down a whopping 7 per cent on the day. The Nasdaq composite was down more than 0.8 percent as technology stocks also dropped.

Last week, the U.S. But this seems less likely as Erdogan and his mouthpieces in the media cast the United States' moves as some kind of epic battle to wreck Turkey, and Trump just gave them fresh ammunition. Rate increases are the central bank's main tool to support the currency and fight inflation.

Paul Greer at Fidelity International said dramatic interventions were now needed as Turkey faced a "downward spiral" of investor confidence. At one point, it was down as much as 19 percent on the day, before rallying a bit to bring it to "only" a 13.7 percent loss.

He railed against "those waging economic war" against Turkey.

Meanwhile, Turkish Treasury and Finance Minister Berat Albayrak is expected to present a new economic development doctrine for the country on Friday.

Oil prices rose more than 1 percent as USA sanctions against Iran looked set to tighten supply, but futures remained lower for the week as investors anxious that global trade disputes could slow economic growth and hurt demand for energy. The plunge in the value of the currency coupled with an inflation rate of almost 16% could cause a lot of damage to Turkey's economy.

Economic experts believe the sharp fall of the lira is mainly because of concerns about the government's economic policies.

Erdogan said Turkey is not afraid of outside "threats".

Relations between the U.S. and Turkey have not been helped by Turkey jailing an American citizen for an alleged attempted coup in 2016.

A diplomatic source, however, familiar with talks of Turkish deputy foreign minister Sedat Onal in Washington this week, told The National that exchanging Mr Brunson for Mr Atilla is not on the table from the USA side.

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