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Turkey pledges lira action to calm markets
ISTANBUL, Aug 13, 2018 (BSS/AFP) – Turkey has vowed to take measures later
Monday to calm market fears sparked by the precipitous plunge in the lira’s
value as its president accused Washington of spearheading an “underhand plot”
against his country.
The dispute between the two NATO allies — which reached new intensity
over the detention of an American pastor in Turkey — has hammered the lira
and also raised questions over the future partnership between Washington and
Ankara.
It caused global market jitters last week as investors fretted over
potential economic contagion from Turkey, particularly to European banks.
The already embattled Turkish lira tumbled some 16 percent against the
dollar on Friday as US President Donald Trump said he had doubled steel and
aluminium tariffs on Turkey.
Overnight it fell to a new record low of 7.2362 to the dollar before
recovering to around 6.8222 in early Asian trading, similar to its trading
price on Friday.
In a call with reporters late Sunday Turkey’s finance minister Berat
Albayrak said Ankara was planning to roll out an “action plan” on Monday in
response to the crisis.
“Our institutions will take necessary action from Monday in order to
relieve the markets,” he said, adding that the plan would centre on “the
state of our banks and the small and medium size enterprises” most affected
by the lira’s plunge.
Albayrak’s comments came as his father-in-law, President Recep Tayyip
Erdogan, said he was in no mood to offer concessions to the United States in
one of the worst spats between the two NATO allies in years.
“The aim of the operation is to make Turkey surrender in all areas, from
finance to politics,” Erdogan told ruling party members in the Black Sea city
of Trabzon.
“We are once again facing a political, underhand plot. With God’s
permission we will overcome this,” he added.
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– ‘Good-bye to partnership’ –
Erdogan appeared unworried by the punitive measures imposed by the US,
saying Turkey could turn to other partners and again terming the crisis an
“economic war”.
“We will give our answer, by shifting to new markets, new partnerships and
new alliances, to the one who waged an economic war against the entire world
and also included our country,” Erdogan said.
“Some close the doors and some others open new ones,” added Erdogan, who
has built closer ties over the last few years with countries from Latin
America, Africa and Asia.
Erdogan appeared to indicate that the entire alliance between Turkey —
which joined NATO in 1952 with strong American backing — and the US was at
stake.
“We can only say ‘good-bye’ to anyone who sacrifices its strategic
partnership and a half century alliance with a country of 81 million for the
sake of relations with terror groups,” he said.
“You dare to sacrifice 81-million (in) Turkey for a priest who is linked
to terror groups?”
American pastor Andrew Brunson has been held since October 2016 on charges
of terror and espionage, and if convicted, could face a jail term of 35
years. Trump has described his detention as a “total disgrace” and urged
Erdogan to free him immediately.
– ‘Release the priest’ –
A delegation led by Turkish Deputy Foreign Minister Sedat Onal failed to
secure a deal last Wednesday in talks in Washington on a number of issues
including Brunson.
Washington earlier this month already imposed sanctions on senior Turkish
officials over the Brunson case, angering Erdogan and prompting retaliatory
measures by Ankara.
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In Trabzon, Erdogan confirmed media reports that Washington gave Onal’s
delegation a deadline for the release of Brunson.
“They tell us to release the priest by Wednesday 6:00 pm, otherwise the
sanctions will begin,” said Erdogan, adding Turkey was not a country to agree
to such requests.
Analysts say that while Washington’s sanctions against Ankara sparked the
immediate crisis, Turkey’s economy has been risking trouble for a while due
to high inflation and the weak lira.
The central bank has over the last few weeks defied calls from markets for
rate hikes to combat these problems, raising fears of interference from
Erdogan who has repeatedly called for low interest rates.
Erdogan had on Saturday described interest rates as a “tool of
exploitation”, in remarks that may not be warmly welcomed by the markets.
The Brunson case is just one of many bones of contention between Turkey
and the United States, ranging from Syria to Ankara’s increasingly cosy
relationship with Moscow.
Erdogan also hit back at US authorities for convicting Mehmet Hakan
Atilla, 47, deputy director general of Turkish lender Halkbank on charges of
helping Iran evade US sanctions on billions of dollars of oil proceeds.
BSS/AFP/HR/0930