Turkey's lira crisis puts European economies at risk, says expert

Andrew Cummings
August 15, 2018

The BBC Turkey correspondent Mark Lowen said Mr Erdogan's boycott could stoke tensions with the United States further - and Turks are waiting nervously for Mr Trump's response.

Brunson, who has been living in Turkey for more than two decades, was accused of helping supporters of Fethullah Gulen, the USA -based cleric who Turkish authorities say masterminded the 2016 coup attempt against President Tayyip Erdogan. He showed no signs of backing down in the stand-off and suggested that Turkey would stop procuring US-made iPhones and buy Korean Samsung or Turkish-made Vestel instead. "We are going to boycott United States electronics", Erdogan said at celebrations of the 17th anniversary of his Justice and Development Party.

Apple, iPhone, and iPad are trademarks of Apple Inc., registered in the US and other countries.

It's not clear from the speech quite what this boycott could entail - whether it's Erdogan encouraging people to buy non-American devices or whether this will be a full-on ban on imports.

Turkish President Tayyip Erdogan greets supporters at the AKP headquarters in Ankara, Turkey on 25 June 2018.

Neither the White House, Turkey's Ministry of Foreign Affairs nor Apple immediately responded to a request for comment.

Turkey detained Brunson after a failed 2016 coup that it blamed on Fethullah Gülen, a former ally of Erdoğan who now lives in Pennsylvania. He added that USA electronics would have sanctions placed on them.

The lira posted gains on forex markets for the first time after days of losses, giving the currency much-needed respite.

Treasury and Finance Minister Berat Albayrak, Erdogan's son-in-law, will speak with about 1,000 foreign investors on Thursday via a teleconference, the private NTV broadcaster said.

"For Bulgaria, Greece and Russia, Turkey accounts for over 5 percent of total goods exports, a significant share", Ken Wattret, chief European economist for IHS Markit, said in a statement.

The Union of Chambers and Commodities Exchanges of Turkey and the Turkish Industry and Business Association called on the government to cut spending, improve ties with the European Union and bring to an end the spat with the U.S.

Erdogan described USA sanctions as an "economic attack" doomed to fail because "Turkey has one of the most solid banking systems in the world in all respects".

White House press secretary Sarah Sanders said the U.S. had seen "no evidence that Pastor Brunson has done anything wrong".

The Turkish central bank has promised that Turkish banks will have all the money they need.

Last month, a Turkish court ordered Brunson's release from prison but placed him under house arrest, prompting a furious reaction from the Trump administration, which had demanded that he be allowed to return to the United States.

After three weeks of heavy pounding, the lira got some respite as signs Turkish authorities were trying to address the unresolved damage triggered an nearly 5-per-cent relief rally to about 6.5 per dollar.

The Turkish leader also said his nation was facing an "economic siege", denouncing the currency movements as an "attack against our country".

Other reports by iNewsToday