Turkish lira rebounds after Qatar pledges $15 billion

Irving Hamilton
August 16, 2018

A decree signed by President Tayyip Erdogan doubled Turkish tariffs on passenger cars to 120pc, on alcoholic drinks to 140pc and on leaf tobacco to 60pc. The currency's climb followed retaliatory tariffs by Ankara against USA goods including rice, coal and cars. His case now lies at the heart of a diplomatic crisis between Turkey and the United States that has sent Turkish lira into free-fall.

The war of words between Turkey and the United States has escalated significantly in the past week as the US calls for the release of an American evangelical pastor. "This is regrettable and a step in the wrong direction".

Ankara acted amid increased tension between the two North Atlantic Treaty Organisation allies over Turkey's detention of a pastor and other diplomatic issues, which have helped to send the lira tumbling to record lows against the dollar.

Markets are concerned by Erdogan's influence over the economy and his resistance to interest rate increases to tackle double-digit inflation.

The Qatari money will be channeled into banks and financial markets, a Turkish government source told Reuters. The currency picked up 6 percent and strengthened briefly at just under 6 to the dollar.

Turkish Vice-President Fuat Oktay said that the tariff increases were ordered "within the framework of reciprocity in retaliation for the conscious attacks on our economy by the U.S. administration". The U.S. State Department on Wednesday joined the chorus in denying the U.S. responsibility for Turkey's current economic disturbances. "Turkey would do well not to test Trump's resolve to see Americans who are wrongfully imprisoned in foreign lands returned home to the United States", Vice President Mike Pence said in a tweet. Turkey's exports to the United States a year ago amounted to $8.7 billion, making it Turkey's fifth-largest export market.

Mr Trump has repeatedly asked for Mr Brunson's release, while Ankara said the decision was up to the court. A higher court is still to rule, his lawyer told Reuters.

Tonga premier challenges Pacific leaders to weight-loss competition
The high rates of obesity in region has led life expectancy to drop while cases of diabetes and cardiovascular disease have risen. According to that ranking, the United States took 12th place, with 36.2 percent of American adults considered to be obese.

President Erdogan jailed Brunson almost two years ago following a military coup attempt, arguing Brunson has ties to the coup plotters.

"The progress that we want to be made is to have Pastor Brunson return home, and I'll leave it at that", U.S. State Department spokeswoman Heather Nauert said on August 9th. But the White House does not plan to lift the metals tariffs, which Sanders said were a national security issue.

"Turkey does not favour an economic war, but it can not remain unresponsive when it is attacked", said Ibrahim Kalin, a spokesperson for President Recep Tayyip Erdogan.

Notably, she said that the USA side would consider lifting sanctions that have been placed on Turkey in specific regards to Brunson and other detained if Ankara released them.

People walk past a Turkish flag on a mosque compound in Istanbul, Wednesday, Aug. 15, 2018.

The Turkish currency began to recover after authorities this week took steps to help bank liquidity and limit swap transactions.

"Rates have gone up by 10 percent".

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