Those banks have required that their loans be repaid in US Dollars, not the Turkish lira. Since their lira is falling apart, they cannot purchase those US dollars and will default on all those loans. This has the potential to bring down the entire European economy!
The lira traded down 20 percent against the U.S. dollar at 6.797 after Trump made the comment in a tweet.
Follow Bloomberg’s liveblog of Turkey’s response to the diplomatic (and economic) crisis, as lira plunges to a record low. Erdogan will speak followed by a news briefing from his son-in-law Finance Minister Berat Albayrak.
I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!
— Donald J. Trump (@realDonaldTrump) August 10, 2018
Lira collapses as Erdogan tells Turks: They have ‘their dollars,’ we have ‘our god’
h/t Nobody You Know