Published: Thu, August 16, 2018
Finance | By Claude Patterson

Qatar pledges $15 billion to Turkey as lira rallies

Qatar pledges $15 billion to Turkey as lira rallies

As President Recep Tayyip Erdogan intensified a diplomatic feud with his US counterpart Donald Trump with a spate of new import tariffs, the nation's banking regulator published new rules that have so far succeeded at lifting the lira off record lows.

The war of words between Turkey and the United States has escalated significantly in the past week as the us calls for the release of an American evangelical pastor.

On Wednesday, Turkey increased tariffs on USA cars, alcohol and cigarettes, after President Recep Tayyip Erodgan's calls for a boycott of American consumer goods a day earlier.

Tariffs were also increased on cosmetics, rice and coal.

The decision shows Turkey giving a proportionate response to American "attacks" on the Turkish economy, Vice President Fuat Oktay said in a tweet.

Kalin also told a news conference on Wednesday that Turkey will take a positive stance towards trading in national currencies to escape from United States dollar pressure.

The currency strengthened some 3 percent against the dollar on August 16, trading at around 5.75 per dollar, hours before Turkey's treasury and finance minister were scheduled to reassure global investors about the economy.

The lira has lost almost 40 percent against the dollar this year, driven by worries over President Tayyip Erdogan's growing control over the economy and his repeated calls for lower interest rates despite high inflation.

By 5.30 p.m. BST (12.30 p.m. ET) the lira had stabilised, and was trading at roughly 6.04 to the dollar.

"Turkey does not favour an economic war, but it can not remain unresponsive when it is attacked", said Ibrahim Kalin, a spokesperson for President Recep Tayyip Erdogan.

On Tuesday, Erdogan announced that Turkey would boycott United States electronic goods, singling out iPhones.

The hikes were published in Turkey's Official Gazette in a decree signed by President Recep Tayyip Erdogan, who has repeatedly described the crisis as an "economic war" that Turkey will win.

The Turkish lira has been falling in value for months, but last week it plummeted 20 percent because of a dispute with Washington over Andrew Brunson, the evangelical pastor from North Carolina.

"The president has a great deal of frustration (about) the pastor not being released", White House press secretary Sarah Sanders said Tuesday.

Sanders lamented that Turkey had treated Brunson, "who we know to be a very good person and a strong Christian who has done nothing wrong, very unfairly, very badly".

The court in the western city of Izmir rejected the appeal and ruled that Brunson will remain under house arrest, the state television TRT reported.

President Erdogan said earlier this week that Turkey should not "give in to the enemy" by investing in foreign currencies.

A White House official warned on Tuesday of additional economic sanctions or other pressures if Turkey continues to refuse to release Brunson. That message came a day after White House national security adviser John Bolton met with Turkish ambassador Serdar Kilic about Brunson's case.

Turkey has also been publicly critical of criminal prosecutions in the USA involving state-run Halkbank official Mehmet Hakan Atilla, as well as Reza Zarrab, a Turkish-Iranian gold trader. Brunson's lawyer told Reuters that the appeal could be heard sooner that the usual three to seven days.

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