Erdogan vows to defy American 'threats'

Remigio Civitarese
Agosto 12, 2018

The new tariffs announced on Friday come as the U.S. increases pressure for the release of American pastor Andrew Brunson, who has been in Turkish custody since 2016 on charges of espionage.

The lira, he noted on Twitter, "slides rapidly downward against our very strong Dollar!"

He also said it was a pity that Washington chose Brunson over Turkey, its partner in North Atlantic Treaty Organisation, and in an opinion piece in the New York Times, he warned the United States that Ankara had other alternatives as allies.

While Turkey and the United States are at odds over a host of issues, the most pressing disagreement has been over the detention of USA citizens in Turkey, notably Christian pastor Andrew Brunson who is on trial on terrorism charges.

"The United States should know that the only result such sanctinos and pressure will bring... will be harming our relationship as allies", the Turkish foreign ministry said in a statement.

Trump's "jubilation in inflicting economic hardship on its North Atlantic Treaty Organisation ally Turkey is shameful", Zarif wrote on Twitter.

President Recep Tayyip Erdogan vowed Saturday to defy USA "threats" over a detained pastor, showing no signs of concessions in a bitter row that has caused the Turkish lira to crash.

"Those who have dollars, euros or gold under their pillows should go and exchange them into [Turkish] lira".

"These are the bullets, cannonballs and missiles of an economic war waged against our country", he said. The lira fell further after Mr Trump's tweet.

President Donald Trump said in a tweet Friday that he would hit Turkey with additional tariffs, as their national currency continues to drop.

Turkey's currency lira dropped 16% against United States dollar on Friday.

Iranian Foreign Minister Javad Zarif said: "Trump's jubilation in inflicting economic hardship on its North Atlantic Treaty Organisation ally Turkey is shameful".

Markets have been deeply concerned about the direction of domestic economic policy under Erdogan with inflation hovering around 16% as the central bank refuses to raise interest rates in response.

In 2017, 19 billion dollars worth of goods were traded between the US and Turkey.

In modern economies, central banks are meant to be independent of governments to make sure they set policies that are best for the economy, not politicians.

The Turkish lira suffered its worst one-day loss in a decade Friday after President Donald Trump announced that the United States would hike tariffs, prompting investor confidence to slump.

The defiant tone and war rhetoric only hurt the lira more, before Erdogan's finance chief and son-in-law, Berat Albayrak, tried to ease investor concerns during a conference, saying the government would safeguard the independence of the central bank. There are already ample signs that Trump's aggressive anti-trade rhetoric is dampening global economic activity as trade wars heat up and even risk morphing into currency wars.

Erdogan had raised eyebrows Thursday when he appeared to invoke divine intervention, saying: "If they have dollars, we have our people, we have our right and we have Allah!"

Analysts suggest Erdogan could have Washington in mind, given Ankara is demanding the extradition of US -based Turkish cleric Fethullah Gulen, who is blamed for masterminding the botched 2016 military takeover.

Amid the dispute, foreign investors could be spooked and try to pull their money out, reinforcing the currency drop and potentially leading to financial instability.

Erdogan on Friday held telephone talks with Russian President Vladimir Putin, discussing economic and trade issues as well as the Syria crisis.

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