Turkish lira volatile as USA warns of further sanctions

Marco Green
August 17, 2018

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. "He's not a spy".

Dashing hopes for a quick solution to the dispute, a Turkish court on Friday rejected an appeal for the evangelical pastor's release from house detention.

Turkey's biggest mobile phone importing companies have cancelled their iPhone orders as Turkish citizens join a move to boycott U.S. products.

President Donald Trump said the USA was not going "to take it sitting down".

The lira has lost almost 40 percent of its value against the dollar this year as investors fret about President Tayyip Erdogan's influence over monetary policy.

I have just authorised a doubling of Tariffs on Steel and Aluminium with respect to Turkey as their currency, the Turkish Lira, slides rapidly downwards against our very strong Dollar! Those sanctions caused great turmoil in financial markets, and contributed to the huge slump seen by the Turkish lira in the last two weeks.

Turkey is also seemingly on the brink of a major debt crisis, as a weakening lira makes it harder for Ankara to pay its global dues.

USA support for Kurdish rebel groups fighting Islamic State fighters in northern Syria is another major difficulty, given Turkey's battle against a Kurdish insurgency in its own country.

Turkey has taken advantage of the United States for many years. Turkey also maintains a small military base in Qatar.

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

Turkey has since imposed retaliatory tariffs on the U.S.

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

The White House said on Wednesday that it would not remove steel tariffs on Turkey, appearing to give Ankara little incentive to work for the release of Andrew Brunson, a pastor on trial in Turkey on terrorism charges.

Turkey's finance minister sparked a recovery in the lira yesterday after he addressed thousands of worldwide investors on a conference call.

The turmoil has raised fears of a looming economic crisis in Turkey and prompted alarm that foreign investors in the country, including Qatar, could be hit in the fallout.

Other reports by Click Lancashire

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