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ISTANBUL (Reuters) - President Tayyip Erdogan denied on Saturday that Turkey is in a currency crisis, dismissing a plunge in the lira as fluctuations which have nothing to do with economic fundamentals.

Turkish President Tayyip Erdogan talks to media in the Black Sea city of Ordu, Turkey August 11, 2018. Cem Oksuz/Presidential Palace/Handout via REUTERS

Speaking after U.S. President Donald Trump doubled tariffs on Turkish steel and aluminum imports, Erdogan described Fridays 18 percent fall in the lira to a record low as the missiles of an economic war waged against Turkey.

Erdogan said those who plotted against Turkey in a failed coup attempt in July 2016 were now trying to target the country through its economy, and pledged to fight back. He did not name any countries.

Those who cant compete with us on the ground have brought online fictional currency plots that have nothing to with the realities of our country, production and real economy, Erdogan told a provincial meeting of his AK Party in the Black Sea coastal town of Rize.

The country is neither crumbling, nor being destroyed or bankrupt or in a crisis, he said, and added that the way out of the currency plot was to boost production and minimize interest rates.

The Turkish lira has lost about 40 percent this year alone, largely over worries about Erdogans influence over the economy, his repeated calls for lower interest rates in the face of high inflation and deteriorating ties with the United States.

The two governments have been at odds over a wide range of topics - from diverging interests in Syria, to Turkeys ambition to buy Russian defense systems, and the case of evangelical pastor Andrew Brunson, who is on trial in Turkey on terrorism charges.

Erdogan also appeared to allude to a deadline for handing over Brunson, although he did not name the United States as having set any such deadline or say precisely when it might have expired. (They are) threatening, saying you will send (him) until 6 pm ... This is not some random country. This is Turkey, he said.

A Turkish delegation visited Washington for talks this week but left with no signs of a breakthrough.

After almost 20 months in a Turkish jail, Brunson was moved to house arrest in July by a court. Since then Trump and his vice president Mike Pence have repeatedly called for his release while Ankara said the decision was up to the courts.

Washington in response sanctioned two Turkish ministers and Trump on Friday announced it was doubling the tariffs on steel and aluminum imports from Turkey, saying relations with Ankara were not good at this time.

An important emerging market, Turkey borders Iran, Iraq and Syria and has been mostly pro-Western for decades. Financial upheaval risks further destabilizing an already volatile region.

A meeting on Friday unveiling a new economic approach by Turkeys finance minister Berat Albayrak, Erdogans son-in-law, did little to offer support for the free-falling lira as investors sought concrete steps such as an interest rate increase to restore confidence.

I am asking you. What possible reason could there be behind the lira which was at 2.8 against dollar in July 15, 2016 to slide below 6 yesterday? During this period, Turkey has set records in its exports, production and employment, Erdogan said.

He repeated a long-standing plan to shift to trading in national currencies and said Turkey was preparing for such a step with Russia, China and Ukraine.

He also repeated his call to Turks to sell their dollar and euro savings to shore up the lira. If there are dollars under your pillow, take these out... Immediately give these to the banks and convert to Turkish lira and by doing this, we fight this war of independence and the future, he said.

He also said it was a pity that Washington chose Brunson over Turkey, its partner in NATO, and in an opinion piece in the New York Times, he warned the United States that Ankara had other alternatives as allies.

Washington must give up the misguided notion that our relationship can be asymmetrical, he said in the opinion piece.

Turkey, home to the Incirlik air base which is used by U.S. forces in the Middle East, has been a NATO member since the 1950s. It is host to a critical part of the Western alliances missile defense system against Iran.

In a separate opinion piece in the pro-government newspaper Daily Sabah, Erdogans spokesman Ibrahim Kalin said Turkeys efforts to solve the crisis with diplomatic methods had been dismissed by the Trump administration, warning that the U.S. runs the risk of losing Turkey as an ally.

The entire Turkish public is against U.S. policies that disregard Turkeys legitimate security demands. Threats, sanctions and bullying against Turkey will not work, he said.

Editing by Clelia Oziel and David Stamp

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