Erdogan says Turkey will boycott US electronics, lira steadies

14 August, 2018, 15:26 | Author: Salvatore Jensen
  • Britain’s FTSE dips as Turkey’s lira crisis shakes world markets

Turkish President Recep Tayyip Erdogan delivers a speech during Turkish ambassadors' conference at Presidential Palace in Ankara, Turkey, on August 13, 2018.

The weakness of the Turkish currency has rippled through global markets.

The report says that ASUS has rushed to reduce risk, quickly selling off its local store of products in Turkey in exchange for USA dollars.

On Tuesday the lira recovered some ground, trading at 6.53 to the dollar at 0918 GMT, up around five percent on the day.

As Turkey's central bank attempted to shore up the financial system yesterday, Erdogan accused the USA of trying to "stab it in the back".

In an interview with the newspaper Hurriyet, treasury and finance minister Berat Albayrak also said the government had no plans to seize foreign currency deposits or convert deposits to the Turkish lira. In speeches Sunday, Erdogan remained defiant, vowing never to give in on interest-rate hikes.

"We will boycott USA electronic goods", Erdogan said in a speech in Ankara, again showing no sign of compromise in the dispute.

In its first statement since what was dubbed "Black Friday" in Turkey, the nation's central bank said Monday that it was ready to take "all necessary measures" to ensure financial stability, promising to provide banks with "all the liquidity" they need.

But the dispute was sparked by a dispute over the detention of American pastor Andrew Brunson, who was jailed almost two years ago in the crackdown that followed a failed military coup in Turkey.

He said Sunday the lira's fall was the result of a plot and did not reflect Turkey's economic fundamentals. "We will implement these", he said.

More than a third of Turkish banks' lending is in foreign currencies, according to Reuters.

Markets were also somewhat soothed by Turkey's central bank loosening cash buffer requirements for the country's banks and its finance minister setting up a call with investors.

"What you want to see is tight monetary policy, a tight fiscal policy and a recognition that there might be some short-term economic pain - but without it there's just no credibility of promises to restabilise things", said Craig Botham, Emerging Markets Economist at Schroders.

Erdogan admitted the Turkish economy had problems - including a widening current account deficit and inflation of nearly 16 percent but added: "Thanks to God, our economy is functioning like clockwork".

The Turkish lira has been under pressure for months but nosedived as Washington moved to introduce sanctions over the detainment of a USA pastor, Andrew Branson, who Ankara insists maintains ties with the self-exiled cleric Fethullah Gulen.

United States pastor Andrew Craig Brunson is at the centre of a diplomatic row between Turkey and the US.

Trump met Turkish President Tayyip Erdoğan at a July NATO summit, and reportedly cut a deal on prisoner releases.

"We (also) have our Venus and Vestel", he said about homegrown Turkish electronics brands.

"I think the investor call Albayrak has scheduled has helped lira firm", said TEB Investment strategist Isik Okte.

Even before the current crisis, the worldwide monetary environment had started turning against emerging currencies as central banks in developed economies, especially the Federal Reserve, began increasing rates as their economies improve.

The U.S. media said the decision was related to the current state of Turkish-American relations and the Brunson case.


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