U.S. dollar rises to 13-month high against Singdollar on Turkish crisis

Andrew Cummings
August 14, 2018

How much has Turkey's currency dropped?

The U.S. has decried the charges as false and has demanded Brunson be released.

The visit came hours after Brunson's lawyer appealed to a court for his release and for a travel ban against him to be lifted.

The current crisis was sparked by Ankara's refusal to release pastor Andrew Brunson, who is now under house detention on terror-related charges and espionage.

The Turkish envoy conveyed the message the pressure and threats would only lead to a "chaos" in relations which could only improve after Washington abandons the language of "threats", said Turkey's foreign minister Mevlut Cavusoglu. The role of construction in the Turkish economy, for example, is comparable to that in Spain or Ireland ahead of the European bust a decade ago, he said.

Angered by the continued detention of an American pastor, the US government imposed sanctions on two Cabinet ministers and threatened more.

Independent economists caution it would be hard to unseat the dollar as the top reserve currency as it is used widely in the global economy, for example to trade in oil and for commercial deals.

"We encourage Turkey to take steps to strengthen democracy", White House spokeswoman Sarah Sanders says the next day.

The day after the summit, Israel let the Turkish woman walk free, but Turkey merely moved Brunson from jail to house arrest, where he remains today.

"We, as the Turkish Airlines, stand by our state and our people".

Donald Trump doubled import duties on steel and aluminium as part of fresh sanctions on the country last Friday.

Brunson, 50, is being tried on espionage and terror-related charges, which he and the United States government vehemently deny.

The financial regulatory body said violators could face two to five years in prison.

Turkish President Recep Tayyip Erdogan gas called for a boycott of iPhones other USA electronic goods in a fiery speech.

Mr Erdogan suggested Turkey would stop procuring US-made iPhones and buy Korean Samsung or Turkish-made Vestel devices instead.

"They don't hesitate to use the economy as a weapon", he said.

It was unclear how Erdogan meant to enforce the boycott.

The growing rift has also sent the Turkish lira into a tailspin.

Making matters worse, President Erdoğan continues to say that the lira's crash has no economic basis and has ruled out the possibility of higher interest rates, which is exactly what economists say is needed.

In a joint statement issued on Tuesday, the industrialists' group TUSIAD and the Union of Chambers and Commodity Exchanges called on the government to allow the central bank to raise interest rates to help overcome the currency crisis.

On August 11 Erdogan warns that Ankara will look for "new friends and allies. unless the United States starts respecting Turkey's sovereignty".

The business groups also urged the drawing up of a roadmap to reduce inflation.

The Associated Press reported that Turkish President Recep Tayyip Erdogan did not clarify how the boycott would be enforced in an announcement of the measure.

Market analysts broadly welcomed his comments but said investors wanted to see action.

The Turkish lira has been hit by concerns over President Recep Tayyip Erdogan's economic policies and a trade and diplomatic dispute with the United States, a North Atlantic Treaty Organisation ally.

Investors are anxious that Turkish companies that borrowed heavily to profit from a construction boom may struggle to repay loans in dollars and euros, since the weakened lira means there is now more to pay back.

In the same month, the prices of basic goods such as dairy products also rose sharply due to a weakening currency and inflation rate.

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