The two leaders spoke by phone earlier today to discuss economic ties amid the deepening crisis.
A Kremlin source said they talked about projects such as energy, just hours after Donald Trump weighed in on the economic crisis by declaring more Turkish sanctions via Twitter.
Donald Trump tweeted: “I have just authorised 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! Aluminium will now be 20 percent and Steel 50 percent. Our relations with Turkey are not good at this time!”
Shares of Turkish steelmakers Kardemir and Erdemir plunged as much as eight percent and 9.9 percent respectively after Trump’s tweet.
Turkish lira fell to an all-time low against the dollar this afternoon, but the country’s leader has brushed aside concerns, telling Turks “we have our God.”
The Turkish President Recep Erdogan urged Turks to sell dollars and gold and buy lira.
Putin and Erdogan told each other on the phone said they were pleased with the positive direction in their economic trade ties.
They also said they were content with the two nations’ cooperation in the energy and defence industry sectors.
The two leaders spoke to discuss economic ties
Erdogan appealed to a crowd in the city of Bayburt to exchange dollars and gold for Turkish lira
Putin and Erdogan also discussed the latest developments in Syria.
Erdogan, Putin and Iran’s President, Hassan Rouhani, met in Sochi in late July to discuss de-escalating the Syrian war.
Despite Turkey being a member of NATO, there is brewing tension with the US over Syria.
Earlier this year, Turkey attack Kurdish YPG forces in northern Syria and actually occupied the Syrian city of Afrin.
This is despite the YPG being US-backed.
Turkey claimed it invaded Syria as part of its “Operation Olive Branch” to clear, what it claims are, terrorists on its border.
In January, Erdogan claimed he was willing to extend the operation, despite risking a US-confrontation.
The US and Turkey have also been at loggerheads over the detention of US evangelic pastor Andrew Brunson on terrorism charges.
Trump’s initial tariffs have begun to bite, and since Trump announced his new set of sanctions, the markets have suffered.
The lira stood 5.75 against the dollar on Friday morning.
This was a weakening further from Thursday’s 5.55.
Turkey’s turmoil hit Wall Street as the Dow Jones Industrial Average fell more than 200 points today.
It comes amid a widespread selloff in global stocks as the Turkish lira tumbled due to concerns over the country’s economy and deepening rift with the US.
Erdogan urged Turks to help defend the country against “economic war” against the country.
The two leaders told each other they were pleased with the positive direction in their economic ties
He appealed to a crowd in the city of Bayburt to exchange dollars and gold for Turkish lira to prop up the plunging currency.
The president then made a second address in Gumushane.
He repeated a line from his earlier speech in which he said: “If there is anyone among you who has gold, dollar, euros under your pillows, you should take it to banks and sell for liras.”
The chaos prompted investors to dump eurozone bank shares today on concerns about their exposure to Turkey.
Shares in BBVA were down 5.7 percent late on Friday, UniCredit was off 6.4 percent and BNP dropped 4.4 percent, all exceeding a 4.3 percent drop in the euro zone bank index .
Turkey accounted for 373 million euros of BBVA’s its first half net attributable profit, 14 percent of the group total, suggesting that it may be the most vulnerable to the country’s market turmoil. The bank declined to comment.
UniCredit, whose Turkish unit Yapi Kredi is viewed by Goldman Sachs analysts as the most vulnerable in terms of capital levels, played down its exposure in its recent earnings presentation.
It argued that the country accounted for less than 2 percent of group revenues and a 10 percent fall in the lira would affect its CET1 ratio – capital that must be set aside as a buffer against financial shocks – by only around 2 basis points. It declined to comment on Friday.
However, a report by Credit Suisse said Turkey remained a risk for UniCredit, Italy’s biggest bank by assets, as the depreciation of the lira could further hit its core capital – which came in lower than expected at the end of June.
The Yapi Kredi stake is valued on the bank’s books at $ 2.5 billion and is currently worth $ 1.1 billion, Credit Suisse said in a report on Friday.