• Turks mobilized to boycott United States products amid strong dollar, deepening split
Turks mobilized to boycott United States products amid strong dollar, deepening split
Turkey on Wednesday raised tariffs on a number products imported from the United States, including passenger cars, tobacco and spirits, retaliating for President Trump's decision last week to double tariffs on Turkish metals. What this does is prevent investors, like hedge funds, from accessing lira liquidity in the offshore swap market.
On Wednesday, a court rejected an appeal for Brunson's release from detention and for a travel ban against him to be lifted, the state-run Anadolu Agency reported.
With the pledge, Turkey is reaping the rewards of standing by its wealthy Arab ally while Gulf neighbors led by Saudi Arabia cut off diplomatic ties with Qatar previous year.
The White House stance appeared to give Turkish authorities little incentive to work for the release of Andrew Brunson, a pastor on trial in Turkey on terrorism charges and whose case Turkish officials have said was a matter for the courts.
Last week, President Trump announced on Twitter that he was doubling tariffs on Turkish steel and aluminum. Like other emerging markets, Turkish companies borrowed heavily in dollars when United States interest rates were low, fuelling a consumer boom that is running out as the dollar strengthens.
The currency lost almost 40 percent against the dollar this year, driven by worries over President Erdogan's growing influence on the economy and his repeated calls for lower interest rates despite high inflation.
On Monday, National Security Council Advisor, John Bolton, met with Turkey's ambassador to Washington, Serdar Kilic.
White House spokeswoman Sarah Huckabee Sanders said "the tariffs from Turkey are certainly regrettable and a step in the wrong direction".
Despite the political tensions, the lira rebounded some 6 per cent on Wednesday, strengthening to around 6.0 to the dollar. Bonds fell, pushing the yield on 10-year notes up nine basis points to 21.46 per cent.
It total, companies have US$217 billion in net foreign-exchange debt, equal to about a quarter of gross domestic product, according to central bank data.
Turkey has doubled tariffs on some U.S. imports, such as passenger cars, alcohol and tobacco, in what its vice president said was a response to deliberate United States attacks on the Turkish economy.
The finance minister will seek to reassure worldwide investors on Thursday in a conference call for which a ministry official said some far 3,000 people had signed up.
Tensions between the United States and Turkey have been steadily rising since American pastor Andrew Brunson was detained by Turkish officials on charges of terrorism and espionage.
The cost of insuring Turkey's sovereign debt against default - already higher than Pakistan and Greece - increased as the standoff between Turkey and the USA worsened.
Brunson's lawyer Cem Halavurt told AFP that a higher court would also discuss his appeal for Brunson's release.
Erdogan has warned Turkey could seek alternative partners pointing to Ankara´s strong ties with Russia, Iran and China.
The tariffs come a day after Erdogan said Turkey would boycott US electronic goods, singling out iPhones. Erdogan's office said the pledge was made by Qatar's head, Al Thani.
Ken Odeluga, market analyst at City Index, a spread betting firm, blamed worries over the Turkish crisis for the stock market falls.