Even as US threatens more action against Turkey, mid-day breaks down the ongoing diplomatic spat and its impact on global markets
Caricature/Uday mohite
The Turkish lira is not in the pink of health, and as a result, it's corporate sector that had borrowed heavily in dollars faces debts it is unlikely to be able to repay, besides a looming banking crisis that will stoke the country's high inflation rate and could push the economy into a recession.
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Experts have blamed President Recep Tayyip Erdogan's bizarre and idiosyncratic economic strategies for the mess. And as ever, US President Donald Trump is always ready to make matters worse — he has doubled import duties on steel and aluminium, sending lira into a free fall, threatening to impose more economic sanctions. And global markets are feeling the heat of this soured friendship, as a host of currencies, including the rupee, fell to their all-time lows on the back of lira.
The white supremacist...
He loves shooting off his mouth and
is unperturbed that he appears as a bigot, inciting others with similar views to target people based on religion, race and gender. Under the garb of 'Make America Great Again', he's imposed a travel ban on citizens from Muslim-majority countries, routinely abused African-Americans, and thrown his weight around as the leader of a world superpower.
... and the Islamic hardliner
In 1998, Erdogan was banned from office and jailed for four months for promoting an extreme view, religion-wise. And while he adopted a 'moderate' outlook for his comeback, he appears to have gone back to his earlier thinking by increasingly cracking down on freedom of expression and press, and pushing Sharia law, gradually alienating himself from liberal world leaders.
What is Uncle Sam's beef?
Turkey has put US pastor Andrew Brunson on trial on terrorism charges. It believes he was behind the coup attempt on Erdogan two years ago. Washington then sanctioned 2 Turkish ministers. After 20 months in jail, a court in July ordered Brunson be moved to house arrest. Trump and Mike Pence have called for his release.
India, in the scheme of things
Rupee, too, has been plummeting, crossing the 70-mark on Tuesday, as scared investors scrambled to play safe and put their money in safer currencies, including dollar, strengthening it further, amid fears of a global meltdown. Just like Turkey, India, too, faces the problem of dollar indebtedness and rising dollar interest rates.
20 Percentage hike in import tariff on aluminium
50 Percentage hike in import tariff on steel
45 Percentage dip in lira against the dollar since the start of the year
70.16 Rupees to a dollar
Other currencies affected
* Euro
* South African rand
* Argentinian peso
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