Turkish lira rallies as Qatar makes $15 bil. loan pledge

Ann Santiago
August 17, 2018

The lira, which has weakened 34% against the dollar this year, firmed to 5.7500 against the dollar by 0722 GMT from a close of 5.95.

Possible measures include an interest rate hike, capital controls, a reduction in spending and an easing of tensions between Turkey and the United States, which are North Atlantic Treaty Organisation allies, he said.

Commenting on the move, the United States leader said: "I have just authorised a doubling of tariffs on steel and aluminium with respect to Turkey as their currency, the Turkish lira, slides rapidly downwards against our very strong dollar".

The White House called the Turkish response a step in the wrong direction and signaled a hard line on Brunson's release.

He said many world states are now dealing with the issue of U.S. sanctions, calling for a concerted global reaction to Washington's economic pressure tools.

The pastor row is one of several between the North Atlantic Treaty Organisation allies, including diverging interests in Syria and US objections to Ankara's ambition to buy Russian defense systems, that have contributed to instability in Turkish financial markets.

The U.S.is reportedly preparing new sanctions against Turkey.

Turkey is ready to discuss its issues with the United States as long as there are no threats, Turkey's Foreign Minister Mevlut Cavusoglu said.

And the day earlier, two Greek soldiers held by Turkey since March for illegally crossing the border were also freed.

Earlier in the day, the currency had shrugged off USA comments ruling out the removal of steel tariffs on Turkey even if it frees an American pastor who lies at the center of the complex feud between Washington and Ankara. "If they have the iPhone, there is Samsung elsewhere".

"Rates have gone up by 10 percent".

He was critical of the government's stranglehold over the central bank, which he said was prevented from taking much-needed measures by the government.

The lira firmed as far as 5.75 against the dollar on August 15 and stood at 6.1320 at 8:43 ET in a move initially triggered by the Turkish court decision on the Greek soldiers who faced espionage charges.

It was also helped by a step from the banking watchdog BDDK, cutting the limit for Turkish banks' forex swap, spot and forward transactions with foreign banks to 25 per cent of a bank's equity.

"They are killing offshore lira liquidity to stop foreigners shorting the lira", he said.

In an interview with CNBC on Thursday, White House economic adviser Larry Kudlow said the strong dollar indicated global confidence in the US economy.

There were fears Ankara may need to turn to the International Monetary Fund as the currency crisis escalated.

Albayrak further said the country's banks have not been affected by the financial crisis and remain in a healthy and strong state, adding, however, that Turkey is prepared to stand by its public banks, if need be.

The decree, which was signed by President Erdogan, raised tariffs by 140 percent on alcoholic beverages, by 120 percent on passenger cars, and by 60 percent on tobacco.

Vice President Fuat Oktay wrote on Twitter that the increase in duties were in response to "deliberate attacks on our economy" by the USA administration.

Turkey's President Erdogan and his French counterpart Emmanuel Macron agreed on a meeting between the two countries' finance ministers "as soon as possible."

North Carolina Pastor Andrew Brunson was imprisoned in Turkey in 2016 on charges of having links to those behind an abortive coup against the Ankara government.

The lira's months-long slide has accelerated as a result of the diplomatic standoff with Washington over Brunson's detention.

Turkey accuses Brunson of espionage and is holding him under house arrest pending his trial. Brunson's lawyer told CBS News that a higher court was still considering the appeal and could overrule that decision.

Mr Erdogan has said Turkey is the target of an economic war, and made repeated calls for Turks to sell their dollars and euros.

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