Turkey increases tariffs on some US imports amid escalating feud

U.S. tariffs only the latest setback for a Turkish economy running on borrowed cash

Erdogan says Turkey will boycott US electronics

Turkey has sharply raised tariffs on USA imports, including passenger cars, alcohol and tobacco.

Turkish President Tayyip Erdogan attends a news conference in Ankara, Turkey, August 14, 2018. It was supported by news of a planned conference call in which the finance minister will seek to reassure investors concerned by Erdogan's control of the economy and his resistance to interest rate hikes to tackle double-digit inflation.

The Turkish lira started slipping again after rebounding more than 8% overnight.

Amid a Turkish-U.S. row, top Turkish firms are joining in a campaign to stop placing ads on U.S. -based online platforms.

Raising interest rates is needed to calm markets and stem the lira's sell-off.

"Rates have gone up by 10 percent".

Turkey on Wednesday announced tariff hikes on a range of US goods in the latest back-and-forth move amid a deteriorating relationship between the two countries.

A treasury desk trader at one bank said this "development showed relations with the European Union could recover while tense relations continue with the USA".

"Remarkable turnaround", Tim Ash, Bluebay Asset Management senior emerging markets analyst wrote in a client note.

The lira rebounded some 8 per cent on Tuesday, helped by news of a planned conference call on Thursday in which the finance minister will seek to reassure global investors.

Turkish lira banknotes are pictured at a currency exchange office in Istanbul, Turkey on August 13, 2018.

A list published in Turkey's official Gazette on Wednesday raised tariffs on tobacco products to 60 percent, spirits to 140 percent and passenger cars to 120 percent. Tariffs were also increased on goods including cosmetics, rice and coal.

Vice President Fuat Oktay wrote on Twitter that the increase in duties were in response to "deliberate attacks on our economy" by the USA administration.

The lira's plunge - which had been ongoing for weeks - was turned into a rout on Friday when US President Donald Trump tweeted that Washington was doubling aluminium and steel tariffs for Turkey.

Turkey's business lobbies have also called for a tighter monetary policy to stabilize the lira, and for a diplomatic solution to the United States-Turkish dispute. Turkey's exports to the United States a year ago amounted to $8.7 billion, making it Turkey's fifth-largest export market.

The government announced the tariffs "under the principle of reciprocity", following sanctions imposed by Washington over the detention of an American pastor, which has sent the lira tumbling to record lows against the dollar.

Trump has repeatedly asked for Brunson's release, while Ankara said the decision was up to the court.

An upper court had yet to rule on the appeal, his lawyer told Reuters.

Hamdi Ates, Turk Telekom's corporate communication head, said the company has told ad agencies not to include its ads in USA outlets.

Erdogan has called on Turks to exchange their dollars for lira in order to shore up the domestic currency.

Investors are anxious not only about Turkey's souring relations with the USA, a longtime North Atlantic Treaty Organisation ally, but also Turkish President Recep Tayyip Erdogan's economic policies and the country's high debt accumulated in foreign currencies.

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