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

Marco Green
August 17, 2018

The Turkish diplomatic source, who is well-informed on the talks between the two countries, said that in order to stem the economic crisis, the government knows it will have to solve the diplomatic crisis with the USA, but has struggled to negotiate a workable deal.

Turkey's Finance Minister Berat Albayrak promised on Thursday the country will emerge "stronger" from the currency crisis sparked by a diplomatic spat with the United States, and ruled out an International Monetary Fund bailout.

The lira has lost almost 40 percent of its value against the dollar this year, driven by worries over Erdogan's growing influence on the economy and his refusal to raise interest rates despite high inflation.

President Trump says American Pastor Andrew Brunson is being held on a "phony charge" and should have been returned to the U.S.

Turkish markets will be closed from midday on Monday for the rest of the week for the Muslim Eid al-Adha festival. Turkey's sovereign dollar bonds extended their gains.

The lira has lost almost 40 percent of its value against the dollar this year, sparking a sell-off in emerging market currencies and weighing on global stocks.

"If they have the iPhone, there is Samsung", he said during a speech in Ankara earlier this week.

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

Memories of past emerging market crises, such as the Asian financial crisis of 1997 and Turkey's 2001 crisis, came back to haunt investors this week and prompted a wave of selling across emerging market assets as a whole.

"Korea we thought was all noise [.] so we bought back on that" said David Vickers, senior portfolio Manager at Russell Investments. The banks were capable of managing the volatility, and there had been no major flow of cash out of deposits lately, he added.

"You act on one side as a strategic partner but on the other you fire bullets into the foot of your strategic partner", Erdogan said. "He said capital controls weren't part of the agenda, and never will be. I think a lot of the market liked hearing that".

Doha has pledged to offer loans worth 15 billion USA dollars to help Ankara ride out its lira crisis.

Trump has used trade tariffs in a series of disputes ranging from with Turkey and China to the European Union.

Erdogan also spoke with French President Emmanuel Macron, a day after talks with German Chancellor Angela Merkel and a $15 billion pledge of support from Qatar.

Albayrak will also meet his German counterpart Olaf Scholz in Berlin on September 21.

Brunson was arrested in October 2016 and moved to house arrest in July. ARD TV reported the man was accused of "terrorist propaganda" after criticizing the government on social media.

A Chinese delegation led by Vice Minister of Commerce Wang Shouwen will meet USA representatives, China's Ministry of Commerce said in a statement, with the Wall Street Journal reporting that talks will take place in Washington on August 21 and 22.

The bank is being investigated over alleged Iran sanctions-busting, another source of tension between the two countries. "We are not expecting any fines on Halkbank for sure", he said. "We have more that we're planning to do if they don't release him quickly".

The ongoing case has caused a deterioration in U.S.

President Erdogan has urged Turks to shore up the currency by not trading in dollars and euros.

Other reports by Click Lancashire

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