Published: Fri, August 17, 2018
Economy | By

Turkey promises U.S. tit-for-tat response

Turkey promises U.S. tit-for-tat response

A Trump administration official told the Associated Press Thursday that National Security Adviser John Bolton spoke Monday with the Turkish ambassador to the US telling him to release Brunson.

The threat comes as Turkey sought to reassure investors rattled by the sanctions-fueled crash of the Turkish lira, insisting the country would emerge stronger.

Secretary of the Treasury Steven Mnuchin said Thursday the United States is prepared to put additional sanctions in place against Turkey if the government of President Recep Tayyip Erdogan does not release American pastor Andrew Brunson, who has been held since 2016.

The currency lost almost 40 percent against the dollar this year, driven by worries over President Erdogan's growing influence on the economy and his repeated calls for lower interest rates despite high inflation.

Analysts also said the political cost of the investment remained to be seen, given that Qatar is also a USA ally and dependent on Washington for both military and political protection.

In response, Erdogan has called for a boycott of U.S. electrical goods while Ankara has sharply hiked tariffs on some USA goods.

Turkey and Qatar have become close economic and political partners.

Turkey has been rocked in recent days by a sharp decline in the value of its lira after US President Donald Trump tweeted last Friday that Washington was doubling aluminum and steel tariffs for Ankara.


Whatever action the United States does take, economists said it looked likely to cause more pain for Turkish assets in the immediate future.

"Korea we thought was all noise [.] so we bought back on that" said David Vickers, senior portfolio Manager at Russell Investments. "Qatar has pledged Dollars 15 billion of direct investments in Turkey", presidential spokesman Ibrahim Kalin wrote on Twitter yesterday.

According to the statistics that were revealed by Mashable, only 2.08 per cent of the Turkish smartphone population own the locally produced Vestel phone until last December, whereas 17.41 per cent own iPhones.

His words came shortly after the high court in Turkey rejected the pastor's appeal for release.

"The corporate backdrop remains very strong in the US and I don't see that changing", said Richard Saldanha, equity fund manager at Aviva Investors.

However, Turks appeared not to be heeding his appeal. Central bank data showed foreign currency deposits held by local investors rose to $159.9 billion in the week to August 10, from $158.6 billion a week earlier.

Optimism about better relations with the European Union after a Turkish court released two Greek soldiers pending trial and a banking watchdog's step to limit foreign exchange swap transactions have also helped the lira.

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