Erdogan says Turkey to 'boycott' USA electronic goods
- Author: David Armstrong Aug 14, 2018,
Aug 14, 2018, 14:13
"The negative development is likely to continue in the coming months since the Turkish lira has fallen sharply against the euro", VDMA said, pointing to U.S. President Donald Trump's decision to impose new sanctions and higher tariffs on Turkey.
Investors are anxious about a confluence of factors: the country's reliance on foreign loans that may stop flowing in as interest rates rise in other economies, like the U.S.; Erdogan's insistence that the central bank not raise interest rates, as most independent analysts say it should; and a spat with the U.S. that has led to sanctions and the fear of greater isolation from longtime allies in the West.
Trump authorized an increase in tariffs on Turkish aluminum and steel products on August 10, while the US also imposed sanctions on Turkish justice and interior ministers for their alleged role in the arrest American pastor Andrew Brunson, who is under arrest for his alleged links with PKK and Gülenist Terror Group (FETÖ).
Terry Sandven, chief equity strategist at US Bank Wealth Management, said the dollar has strengthened because economic growth has picked up and other regions aren't doing as well. "We have not made concessions on justice so far, and we will never make any".
"Nobody has an interest in an economic destabilization in Turkey".
"The aim of the operation is to make Turkey surrender in all areas from finance to politics".
Experts said that despite a slight rebound in the lira's value yesterday, following support from Turkey's central bank, further falls could follow, making holidays even cheaper. "By the will of God we will overcome it too", added the president.
Turkish President Recep Tayyip Erdogan on Monday promised action against "economic terrorists" plotting to harm Turkey by spreading false rumours and vowing that they would feel the full force of the law, Reuters reported.
Erdogan signaled he was not looking to offer concessions to the United States or financial markets.
USA support for Kurdish rebel groups fighting Islamic State (IS) fighters in northern Syria is another major difficulty, given Turkey's battle against a Kurdish insurgency in its own country.
Some would like to see Turkey's central bank increase interest rates.
President Tayyip Erdogan tried to reassure supporters in a rally amid Turkey's currency crash.
Additionally, Turkey has a vast amount of debt denominated in United States dollars.
"For the time being Turkey's financial crisis looks localised but the country's central bank has perhaps only days to stop the decline of the currency before the lira's freefall results in loan defaults, starts seriously affecting the country's financial system and potentially starts spilling over onto European banks", she said.
Erdogan rejected speculation that Turkey would seek a rescue package from the International Monetary Found.
On Monday, US National Security Adviser John Bolton met Turkish ambassador Serdar Kilic at the White House to discuss relations.
Overall this year, the lira has lost more than 40 percent against the dollar. Emerging market currencies and equities have also fallen in value since Friday, while investments seen as safe havens, such as the us dollar, Treasury bonds, gold and the Japanese yen have strengthened.
Turkey and the United States have disagreed on a number of issues in recent years, including the war in Syria and a US refusal to extradite Fethullah Gulen, a cleric Erdogan claims is behind the botched attempt to unseat him.