Turkey will emerge stronger from lira crisis despite row with United States: minister

Daniel Fowler
August 17, 2018

Erdogan has rejected Washington's demands to release him, while announcing new tariffs on USA imports.

Trade Minister Ruhsar Pekcan said Turkey had doubled tariffs on 22 products imported from the United States, saying the tariffs were together worth an additional $533 million.

The action drove the Turkish lira to a record low against the dollar and spurred declines in other emerging market currencies.

Erdogan has called on Turks to exchange their dollars for lira in order to shore up the domestic currency.

Washington warned more economic pressures may be in store for Turkey if it refuses to release Brunson, a White House official said on August 15.

Qatar pledged invest up to $15billion in Turkey after Emir Sheikh Tamim bin Hamad Al Thani held talks with President Erdogan in Ankara on Wednesday.

Also helping the currency were moves by Turkey this week to gain favor with European countries, including releasing two Greek soldiers and an Amnesty International human rights campaigner from prison. "The tariffs are specific to national security", she said.

The United States was the fourth largest source of imports to Turkey previous year, accounting for US$12 billion, according to International Monetary Fund statistics. "Turkey would do well not to test @POTUS Trump's resolve to see Americans who are wrongfully imprisoned in foreign lands returned home to the United States", Vice President Mike Pence said in a tweet.

Turkey hiked Wednesday tariffs on imports of several key U.S. products in retaliation for American sanctions against Ankara, as a bitter dispute between the two allies that has battered the Turkish lira showed no sign of ending.

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Trump said the United States had helped Turkey in a related incident, but that the North Atlantic Treaty Organisation ally had not repaid the favor.

In retaliation, Turkey's doubled tariffs on US passenger cars, coal and other goods and announced a boycott of USA electronic goods.

Treasury Secretary Steve Mnuchin on Thursday said that the United States would levy more sanctions on the troubled Turkish economy if Ankara does not release an American pastor.

Al-Shehri said Ankara appeared to have blackmailed Qatar into supporting it.

The White House has complained about Turkey's treatment of Andrew Brunson, the detained American pastor.

"Albayrak continues to reassure investors that Turkey will address its structural problems but at this stage, crisis measures, including sharply higher [interest] rates, a tightening of fiscal policy and support to troubled sectors such as construction, retail and banking will be key", he said.

"I'm confident that the grave abuse of the role of the United States dollar as a global reserve currency will result over time in the weakening and demise of its role", the top Russian diplomat said.

Earlier on Wednesday, Erdogan spoke on the phone with German Chancellor Angela Merkel, the Turkish presidency.

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