Turkey: US won't achieve aims through sanctions

Turkey’s President Tayyip Erdogan accompanied by his wife Emine Erdogan

Turkey's weakened currency, the lira, plunged by a full 20% in response.

Erdogan renewed his call for Turks to sell dollars and buy lira to boost the currency, while telling business owners to not stockpile the American currency.

The top USA diplomat in Turkey has called for the cases against an American pastor and others held in Turkey to be resolved "without delay" and in a "fair and transparent manner".

The dispute centres on Turkey's refusal to release American pastor Andrew Brunson.

Mr Brunson's lawyer Ismail Cem Halavurt on Tuesday appealed again to a Turkish court to release him and lift his travel ban.

Ties between the two North Atlantic Treaty Organisation allies have also nosedived over U.S. support for Syrian Kurdish forces, Ankara's plans to buy a Russian missile system and Turkey's demand that Washington extradite US-based Islamic cleric Fethullah Gulen, whom Erdogan blames for the failed July 2016 coup bid.

The Russian foreign minister claims that the US increased use of sanctions will erode the dollar's role as the top reserve currency.

He noted that the US has punished its own allies, an apparent reference to Turkey that recently faced USA sanctions over the continued detention of an American pastor on espionage and terror-related charges. Turkey's president, Recep Tayyip Erdoğan, is opposed to raising interest rates to cool down the economy and support the currency, and has used his recent election victory to impose his unorthodox views on the country's central bank.

Lavrov says that Washington's policies will undermine the dollar's position as the global reserve currency of choice.

Why is Turkey's currency sliding?

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.

Turkey and the U.S. also disagree over their military interventions in the Syria war, Ankara's plan to buy missile defense systems from Russian Federation and the USA conviction of a Turkish state bank executive on sanctions-busting charges in January.

This rapid slump came after US President Donald Trump announced a doubling of steel and aluminium tariffs on Turkey in a retaliatory move. Brunson was arrested in 2016 on charges of participating in a failed military coup against Erdogan's government.

The financial regulatory body said violators could face two to five years in prison.

Still, the currency lost nearly 10 per cent on Monday and nerves were briefly tested again as President Tayyip Erdogan urged Turks to boycott US electronic products in response to recent criticism from Washington.

"If they have iPhone, there is Samsung on the other side".

It was unclear how Erdogan meant to enforce the boycott.

If the Turkish lira keeps dropping though, it could start to have an impact for next season.

Turkey has been hit by financial turmoil, with the lira plunging over deepening concerns about the government's economic policies and a diplomatic spat with the United States.

In a joint statement issued Tuesday, the industrialists' group TUSIAD and the Union of Chambers and Commodity Exchanges called on the government to allow the central bank to raise interest rates to help overcome the currency crisis.

A currency crisis blew up last week in the Turkish lira on investor concerns over Prime Minister Tayyip Erdogan's increasing control over the economy and deteriorating relationship with the United States.

"The dollar reached seven liras and people are spending less now", said the hairdresser, who declined to give his name.

The Turkish lira has been hit by concerns over President Recep Tayyip Erdogan's economic policies and a trade and diplomatic dispute with the United States, a North Atlantic Treaty Organisation ally.

The Turkish lira jumped more than 6 percent to 6.4609 per dollar as of 10:08 am in Istanbul.

It is not just banks taking a hit from the currency's collapse.

US crude fell 2.29 percent to $66.08 per barrel and Brent was last at $71.53, down 1.76 percent on the day.

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