Turkish turmoil to send economic storm clouds over U.S. soon

Roman Schwartz
August 15, 2018

Ankara has repeatedly said the case is up to the courts and a Turkish judge moved Brunson from jail to house arrest in July.

"Significantly more than just official promises of action are needed to exit the current crisis", said Andy Birch, principal economist at IHS Markit, calling for "a sharp central bank rate rise".

"It took place on the margins of the North Atlantic Treaty Organisation summit", the source said. Signs of the world's second-largest economy losing momentum and the ongoing Sino-U.S. trade conflict have weighed on Chinese equities. The argument over the pastor, Andrew Brunson, has sparked the worst crisis between the North Atlantic Treaty Organisation allies in decades and led to fears that Turkey's economic problems could cause a new global financial crisis.

U.S. Charge d'Affaires Jeffrey Hovenier talks to members of the media after visiting United States pastor Andrew Brunson, who is being held under house arrest in Izmir, Turkey, Aug. 14, 2018. Turkey's state-run news agency and US officials say US National Security adviser John Bolton had met with the Turkish ambassador to Washington on Monday.

In imposing punitive tariffs on Turkish aluminum and steel exports, the Trump administration has broken with decades of US emerging market crisis management.

"We will protect our economic independence by being tight-knit together".

Turkish President Tayyip Erdogan attends a news conference in Ankara, Turkey, Aug. 14, 2018.

President Recep Tayyip Erdogan announced Turkey's latest salvo Tuesday, saying his country will boycott USA -made electronic goods and turn to other manufacturers including South Korea's Samsung or Turkey's Vestel. Singling out the iPhone, he suggested Turks buy Samsung Electronics Co. or locally made Venus Vestel smartphones instead.

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. "Erdoğan asked Trump for help with the lady in prison in Israel".

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The lira is down roughly 40 per cent his year, dropping 10 per cent of its value on yesterday alone.

Erdogan has called on Turks to exchange their dollars for lira in order to shore up the domestic currency.

In a joint statement Tuesday, Turkish business groups called on the government to institute tighter monetary policy in order to combat the currency crisis. Earlier this week it was reported that Erdogan has accused the United States of stabbing them in the back.

The Turkish central bank has pledged to take "all necessary measures" to stabilize the country's economy to make sure the banks have all the money they need.

The country's finance minister - who is also Mr Erdogan's son-in-law - will seek to reassure around 1000 global investors in a teleconference scheduled for Thursday.

Brent crude futures LCOc1 dipped 0.2 percent to $72.31 a barrel and US crude CLc1 shed 0.35 percent to $66.81 a barrel. This has caused the dollar to increase, the lira to fall, and Turkish bond yields to rise.

"What is happening in Turkey goes far beyond the United States and the United States' recent policies and impositions of various policies and mechanisms", Nauert said.

Local individuals and businesses sold an estimated US$50 million to US$60 million of foreign exchange on Tuesday morning, according to an Istanbul-based currency trader who declined to be named as they were not authorized to speak to the media.

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