USA threatens more sanctions on Turkey if Brunson not released

Mae Love
August 16, 2018

The crisis came days after US President Donald Trump announced via Twitter a doubling of steel and aluminium tariffs on Turkey, as Washington pushes Ankara to release Evangelical Christian pastor Andrew Brunson, who is being held on terrorism charges for almost two years. What this does is prevent investors, like hedge funds, from accessing lira liquidity in the offshore swap market.

Doha has $20 billion worth of investments in Turkey, official figures showed last month, and Ankara is now one of the top exporters to the emirate.

Praising the bilateral relations between the two countries, Cavusoglu said the national flag carrier Turkish Airlines would launch flights to Port Sudan.

The White House stance appeared to give Turkish authorities little incentive to work for the release of Andrew Brunson, a pastor on trial in Turkey on terrorism charges and whose case Turkish officials have said was a matter for the courts.

Investors are anxious not only about Turkey's souring relations with the U.S., a longtime North Atlantic Treaty Organisation ally, but also Turkish President Recep Tayyip Erdogan's economic policies and the country's high debt accumulated in foreign currencies.

Erdogan's clear message was, "We will not raise interest rates in the face of a currency collapse", Stein explained.

The row with Washington has helped drive the lira to record lows, with the Turkish currency losing more than 40% of its value against the dollar this year.

U.S. White House Press Secretary Sarah Huckabee Sanders holds the daily briefing at the White House in Washington, D.C., U.S. August 15, 2018.

The lira had already rebounded about 8 percent on Tuesday on news of a planned conference call on Thursday in which the finance minister will seek to reassure global investors.

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"Rates have gone up by 10 percent".

It total, companies have US$217 billion in net foreign-exchange debt, equal to about a quarter of gross domestic product, according to central bank data. A Finance Ministry official said so far 3,000 people have signed up for the call.

Turkey on Wednesday said it was hiking tariffs on imports of several key USA products in retaliation for American sanctions against Ankara, as a bitter dispute between the two allies that sent the Turkish lira into freefall showed no sign of ending.

Turkey's weakened currency, the lira, plunged by more than 20% in response to those United States sanctions.

Explaining the new tariffs, Turkish Vice-President Fuat Oktay said the rises were ordered "within the framework of reciprocity in retaliation for the conscious attacks on our economy by the USA administration".

Tensions between the U.S. and Turkey have been steadily rising since American pastor Andrew Brunson was detained by Turkish officials on charges of terrorism and espionage. An upper court had yet to rule on the appeal, his lawyer told Reuters. "We have other partnerships and alternative markets".

Erdogan said on Tuesday Turkey would boycott U.S. electronic products as the row escalated.

Mr Erdogan has said Turkey is the target of an economic war, and made repeated calls for Turks to sell their dollars and euros.

"We are the branch of a foreign textile company producing overseas in the greenback and sell in Turkish currency", he noted.

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