Turkish economy is solid, strong: President Erdogan

The Turlisk lira slumped over 20% in the last four days

The lira has been hammered by worries over President Erdogan's handling of the economy, a refusal to raise interest rates to curb rampant inflation and worsening ties with the US.

The announcement came in his address to a symposium organized by the Foundation for Political, Economic and Social Research (SETA) on the 17th foundation anniversary of the ruling Justice and Development (AK) Party.

"There is a price we're paying for the period we're in", he said in a combative speech in Ankara.

The dispute with the United States has centered on the continued detention of an American pastor who is on trial for espionage and terror-related charges.

On Friday (August 10) Trump announced the U.S was doubling tariffs on steel and aluminum from Turkey saying relations were quote "not good at this time". "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.

More than a third of Turkish banks' lending is in foreign currencies, according to Reuters. Turkey's interior ministry said on Monday that it was taking legal action against more than 300 social media accounts that had posted messages that harmed the lira, local media reported.

In its first statement since what was dubbed "Black Friday" in Turkey, the nation's central bank said Monday that it was ready to take "all necessary measures" to ensure financial stability, promising to provide banks with "all the liquidity" they need.

Terry Sandven, chief equity strategist at US Bank Wealth Management, said the dollar has strengthened because economic growth has picked up and other regions aren't doing as well.

The lira tumbled alongside the country's benchmark equity index after President Recep Tayyip Erdogan maintained his defiance toward the USA and financial-market orthodoxy in speeches on Sunday.

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The lira plunged to a fresh record low of 7.24 against the dollar during in Asia Pacific trade, where markets were opening for Monday morning. The fear is of a full-blown emerging market crisis.

The lira's plunge and subsequent sell-off in Turkey is giving investors an unwelcome reminder of past crises in emerging markets, rattling nerves worldwide and leaving traders speculating on how bad contagion can get.

The Turkish lira plummets, losing some 16 percent of its value against the dollar in one day.

"We will give our answer, by shifting to new markets, new partnerships and new alliances, to the one who waged an economic war against the entire world and also included our country", Erdogan said.

Investors question whether Erdogan's government can cope with the plunging currency, the diplomatic spat with Washington and other problems.

In the United States, new record highs for Apple Inc and Amazon.com Inc were not enough to outweigh declines in financial companies that are the most likely to be affected by the steep decline in the lira.

Investors globally fear the damage spreading and have been prompted to sell riskier assets, including other emerging market currencies.

Tax rules would be implemented if necessary, he said, but the government had no plans to seize foreign currency deposits or convert deposits to the Turkish lira.

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