The economic and political mess in Turkey is starting to take a real toll on world markets, and the Turkish government's new strategy doesn't seem to be satisfying anyone. The Turkish lira continues to plunge, at one point hitting a record low against the dollar on Monday, reports the BBC. At the start of the year, one US dollar would buy four lira, and today it would buy about seven, notes CNN. The nation's central bank took some steps to ease the crisis, but it did not raise interest rates as investors hoped, and markets tumbled in Asia and Europe. US stock futures also were down Monday morning, notes MarketWatch. At play is a "cocktail of economic vulnerabilities," volatile national politics, and a worsening spat with the US over a detained American pastor, reports the Wall Street Journal.
"We will not give in," Turkish President Recep Tayyip Erdogan said in a speech Sunday, resisting calls to raise rates and blasting the US, which has been ratcheting up sanctions because of the pastor. "If you come at us with your dollars then we will find other ways to do business." He also implored traders not to rush to buy dollars. "Otherwise I will have to implement Plan B or C," he said, with the Journal noting that he did not actually say what either of those plans might be. The financial trouble is hitting other emerging markets that rely on foreign investors particularly hard, including those in South Africa and India. The Turkish government, meanwhile, also said it was going after the owners of 346 social media accounts for expressing "provocative" views about the lira and worsening the crisis. (Read background about the US pastor now in the spotlight.)