President Erdogan says Turkey to boycott US electronic goods

Roman Schwartz
August 16, 2018

Despite a call from Turkish business groups for President Recep Tayyip Erdogan to mend ties with Washington, the leader was defiant on Tuesday, calling for a boycott of United States electronic equipment.

It added that Turkey's current economic situation can be managed with decisive and well-calibrated policies, such as "appropriate fiscal consolidation measures" and "working to defuse tensions with the U.S".

Investors seemed to look through the fiery rhetoric, pushing the lira off record lows on confirmation that Turkish and USA government officials met on Monday.

Turkish business groups are begging President Recep Tayyip Erdogan to make amends with the an effort to save the Turkish economy, the Financial Times reported.

While even a widespread Turkish boycott would do little to dent USA economic interests, it shows Erdogan refusing to give in to market turmoil that's pushed borrowing costs to record highs and threatens to descend the nation into a financial crisis.

Turkish President Recep Tayyip Erdogan said on Tuesday that Turkey will boycott electronic products from the United States, retaliating in a dispute with Washington that helped drive the lira to record lows.

Behind the scenes, however, diplomatic dialogue appears to have resumed.

"Whatever we pay for from overseas, we will do here", he said.

Retail investors in Turkey are understood to have sold $50m (£39m) to $60m in foreign currency with the jump in the lira exaggerated by thin trading volumes, according to Bloomberg.

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On Wednesday, the lira traded at 6.4125 to the us dollar, weakening from a close of 6.3577 a day earlier.

Investors are anxious not only about Turkey's souring relations with the United States, a longtime North Atlantic Treaty Organisation ally, but also Erdogan's economic policies and the country's high debt accumulated in foreign currencies.

The threat to the lira, the stock market and the economy has drawn a sharp reaction from Erdogan, who has promised to look for new economic friends, including among traditional USA adversaries.

Liberty Times that four major Taiwanese companies are likely to be on the losing end of investments and ventures in Turkey if the US sanctions are implemented and maintained for any significant amount of time. Erdogan warned that the putting decades-old alliances at risk and pushing Turkey to seek allies elsewhere.

In the case of the American pastor, the lawyer representing Andrew Brunson again asked a Turkish court to release him from house arrest. It was not clear when the court would consider the appeal. He denies the charges.

Brunson faces up to 35 years in prison if found guilty. The currency strengthened to around 6.20 lira against the dollar on Wednesday after the government took steps to shore up the currency by reducing the daily limit in bank foreign currency swap transactions and amid news that the finance minister would address foreign investors on Thursday.

The main Japanese market, the Nikkei 225, erased early gains to close 0.68% down on the day, giving back some of the ground made on Tuesday when it jumped by more than two percent.

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.

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