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Turkish President Recep Tayyip Erdogan says his country will boycott USA -made electronic goods amid a diplomatic spat that has helped trigger a Turkish currency crisis.

Over the last few days, Turkey has seen a significant devaluation of its currency the lira, which has lost more than 45 percent of its value this year. And it makes it more expensive for Turkish companies to repay their foreign-denominated debts, raising economic concerns that can further weaken the currency.

But now the U.S. Federal Reserve is raising rates.

The lira was around 6.55 to the dollar on Tuesday, up 6% on the previous day after the central bank freed up cash for banks, and a slight recovery from a record low of 7.23 on Sunday. Ultra-low interest rates in the USA and Europe have for years encouraged companies in Turkey to borrow in foreign currencies.

Recep Tayyip Erdogan once again urged Turks to sell dollars and buy liras to help boost the currency.

Financial markets have taken fright at inflation, rising at an annual rate of more than 15%, and have been selling the Turkish lira, which is down by 45% against the USA dollar since the start of the year. We will impose a boycott on U.S. electronic products.

USA sanctions against Turkey recently sent the country's currency, the lira, into free fall.

"If [the US] has the iPhone, there's Samsung on the other side", Mr Erdogan said, referring to Apple and its South Korean competitor.

U.S. President Donald Trump has demanded the pastor's release and said he had authorized the doubling of tariffs on steel and aluminum imports from Turkey. "We are going to boycott USA electronics", Erdogan said at celebrations of the 17th anniversary of his Justice and Development Party. The EU put new taxes on USA motorcycles in response to the Trump administration's tariffs on products imported from Europe.

The Central Bank of Turkey (CBRT) now has insufficient foreign exchange reserves to finance this deficit. 'What do you want to do?

Turkey has declined to release Brunson from custody, instead placing the pastor on house arrest for the duration of his trial.

Soner Cagaptay, director of Turkish research programme at the Washington Institute, said the confrontation has now become between the leaders of the two countries, particularly over detained American pastor Andrew Brunson.

The top USA diplomat in Turkey has called for the cases against an American pastor and others held in Turkey to be resolved "without delay" and in a "fair and transparent manner".

"I think the investor call Albayrak has scheduled has helped lira firm", said TEB Investment strategist Isik Okte.

Italy's FTSE MIB jumped 0.8 percent with banks gaining as bond yields fell after the government said it had agreed to preserve the stability of state finances and lower public debt.

Trump's national security adviser John Bolton met with Turkish officials in Washington on Monday, Turkey's state-run media reported.


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