Mnuchin: Turkey will face more sanctions if pastor not released 'quickly'

Roman Schwartz
August 17, 2018

Investors are looking for substantive economic policy changes by Erdogan - namely the acceptance of higher interest rates - whereas the president has so far reacted mainly by blaming foreign powers, particularly the United States, which he says is waging an "economic war".

The punitive steps come after Erdogan called on Turks to boycott American electronics, such as Apple Inc.'s iPhone, which have in any case become more expensive as the lira lost nearly 40 percent of its value this year.

It is believed many Qatari investors could be at risk from a Turkish economic crisis.

In total, companies in Turkey have $217 billion in net foreign-exchange debt, equal to about a quarter of gross domestic product, according to central bank data.

U.S. national security adviser John Bolton on Monday met Turkey's ambassador to the United States to discuss Brunson's detention.

Since January, the Turkish lira has lost more than 34 percent of its value against the dollar, pushing up the price of everyday items.

The United States is also considering a fine against Turkey's state-owned Halkbank for allegedly helping Iran evade USA sanctions.

"Qatar & Turkey's relationship goes beyond strategic partnerships", Qatar's interior minister Abdullah bin Nasser bin Khalifa Al Thani tweeted in the wake of the announcement.

President Erdogan said Turkey was taking measures to stabilise the economy, and should not "give in to the enemy" by investing in foreign currencies.

'Yet at the same time (Turkish authorities) are reluctant to adopt orthodox policy frameworks, ' JP Morgan said.

Turkey announced Wednesday increased duties on USA products including cars, tobacco and alcohol in retaliation to US sanctions and tariffs on Turkey in an on-going feud over the detention of an American pastor.

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Turkish media reports say Treasury and Finance Minister Berat Albayrak has told global investors that Turkey would come out of the current "currency fluctuation" stronger than before.

The high-level conversation comes as Turkey shows signs of a rapprochement with European countries amid an on-going trade and diplomatic spat with the United States that triggered a Turkish currency crisis.

"As they are taking relations with Turkey to a breaking point for one pastor, we have yet to see either the Obama or the Trump administration take any concrete steps towards Turkey's rightful and urgent national security matters", Kalın claimed.

WASHINGTON (Reuters) - The United States is warning more economic pressures may be in store for Turkey if it refuses to release a jailed American pastor, a White House official said on Tuesday, in a dispute that has further strained relations between the North Atlantic Treaty Organisation allies.

Turkish President Tayyip Erdogan announced yesterday that the country would boycott all electronics from the USA amid tension and rising conflict between the two countries and its leaders.

The currency drop is particularly painful for Turkey because it has accumulated a high debt in foreign currencies, and because recent trade tariffs from the US have further injured the economy.

Speaking of Brunson's case, Sanders said, "We feel that Turkey and specifically President Erdogan have treated Pastor Brunson. very unfairly, very badly".

While the Brunson dispute appeared far from being resolved, Turkish President Tayyip Erdogan got a shot in the arm from Qatar's Emir, who approved a package of economic projects, investments and deposits after the two met in Ankara.

Earlier Erdogan doubled tariffs on imports of USA passenger cars to 120 percent, alcoholic drinks to 140 percent and leaf tobacco to 60 percent.

Tariffs were also doubled on goods such as cosmetics, rice and coal. He was jailed for about two years before being moved to house arrest last month.

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