Turkish relations spiraling amid tit-for-tat penalties over detained pastor

Andrew Brunson the US pastor accused of being a spy for Kurdish separatists arrives home in Izmir after being released from prison in July on house arrest

The evangelical pastor is accused of terrorism charges and aiding the network of a USA -based Islamic preacher blamed by Ankara for masterminding a coup attempt in July 2016 against Turkish President Tayyip Erdogan. "We have other partnerships and alternative markets". He suggested Turks would buy local or Korean phones instead, although it was unclear how he meant to enforce the boycott.

Brunson, a North Carolina native, was the pastor of a Presbyterian church in Turkey.

Also helping was Turkey's decision to release two Greek soldiers from prison on Tuesday, increasing prospects for improved relations with the European Union.

A court on Wednesday rejected an appeal for the release of Andrew Brunson from house arrest.

He said that was likely to happen by the end of business on Wednesday.

Administration sources says further sanctions against Turkey are under active consideration.

Turkey has meanwhile resisted pressure to release Brunson - who has been held for two years and is now under house arrest - with officials warning it could face further sanctions.

However, Lavrov did not announce any immediate commitment to drop the dollar in trade with Turkey or provide it with financial aid, leaving observers guessing if the two countries, both hit by U.S. sanctions, have agreed on any bilateral deal.

Investors are anxious that about Erdogan's control over the central bank and his pressure to keep it from raising interest rates.

The court in the western city of Izmir ruled that Brunson, who faces 35 years in jail over terror and espionage charges, will remain under house arrest, the state television TRT reported.

FILE PHOTO: A 100 Turkish lira banknote is seen on top of 50 Turkish lira banknotes in this picture illustration in Istanbul, Turkey August 14, 2018.

That was a rare Trump understatement, as the two countries face sharp differences on the case of Brunson and other detained Americans, Erdogan's consolidation of power, USA support for Kurds in Syria, growing Turkish relations with Russia, Turkey's evasion of US sanctions and more.

Yet last September, Erdogan suggested that Turkey could free Brunson if Washington handed over Gulen, who lives in self-imposed exile in Pennsylvania.

He is also charged with supporting the banned Kurdish PKK movement.

"Although China does not want to upset the U.S., it is in China's national interest to cooperate with Turkey, which is still a geo-strategically important country between Europe and Asia", he said.

The United States and Turkey also have diverging interests over Syria, which is enmeshed in a protracted civil war.

"We've already seen settlements in national currencies between Russian Federation and the BRICS", he said, referring to the bloc that also includes Brazil, India, China and South Africa.

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