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

Turkish lira rebounds after Qatar pledges $15 billion

Turkish lira rebounds after Qatar pledges $15 billion

Earlier on Wednesday, Qatar pledged $15 billion in investment to Turkey, which will be channeled into banks and financial markets, a Turkish government source told Reuters.

Tensions between the U.S. and Turkey have been steadily rising since American pastor Andrew Brunson was detained by Turkish officials on charges of terrorism and espionage.

Turkey's biggest mobile phone importing companies have cancelled their iPhone orders as Turkish citizens join a move to boycott USA products.

Qatar's Emir Tamim bin Hamad Al Thani announced the package while meeting with Turkish President Tayyip Erdogan in Ankara on Wednesday.

"The currency is now clearly undershooting fair value", the global financial industry association said in a report titled "Turkey Update - Looking for a Way Forward".

The move by Turkey's Gulf ally offered further support to a lira rally after the Turkish central bank tightened liquidity and curbed selling of the currency.

Markets are concerned by Erdogan's influence over the economy and his resistance to interest rate increases to tackle double-digit inflation.

"Turkey's currency has bounced back from record lows after a lifeline from Qatar".

The lira had nosedived in recent weeks, hitting 7.24 last week, amid a diplomatic and trade dispute with the United States.

A Turkish court on Wednesday rejected US pastor Andrew Brunson's appeal to be released from house arrest and for his travel ban to be lifted, although a ruling from a higher court on the matter is still forthcoming. Tariffs were also doubled on goods such as cosmetics, rice and coal. Meanwhile, Turkey retaliated on Wednesday by doubling the tariffs on the United States imports of spirits, cars and tobacco.

Ankara's latest move follows President TrumpDonald John TrumpDems make history, and other takeaways from Tuesday's primaries Pawlenty loses comeback bid in Minnesota Establishment-backed Vukmir wins Wisconsin GOP Senate primary MORE's announcement last week that he will double tariffs on imports of steel and aluminum from Turkey until it releases USA pastor Andrew Brunson, who was arrested in 2016.

The United States sanctioned Justice Minister Abdulhamit Gul and Interior Minister Suleyman Soylu, blaming both for being involved Brunson's arrest and detention.

The currency picked up 6 percent and strengthened briefly at just under 6 to the dollar.

Optimism about better relations with the European Union after a Turkish court released two Greek soldiers pending trial and a banking watchdog's step to limit foreign exchange swap transactions have also helped the lira.

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