Published: Tue, August 14, 2018
Finance | By Gustavo Carr

Erdogan vows action against 'economic terrorists' over lira plunge

Erdogan vows action against 'economic terrorists' over lira plunge

"You are exchanging your strategic partner in North Atlantic Treaty Organisation for a priest". "Can such a thing be accepted?" "It is a national fight", he says.

Most Asian stock markets were mixed Tuesday after Wall Street declined as Turkey's central bank struggled to contain a currency crisis that is feeding fears about other emerging markets.

Erdoğan has refused to accept interest rate hikes and other measures that could stabilize Turkey's economy and has instead blamed the crisis on global "economic terrorists".

In his remarks a day earlier, Erdogan said it was a pity the United States was choosing Andrew Brunson - a USA pastor on trial in Turkey on terrorism charges - over its North Atlantic Treaty Organisation ally.

White House press secretary Sarah Sanders said the United States had seen "no evidence that Pastor Brunson has done anything wrong".

President Recep Tayyip Erdoğan said Tuesday that Turkey will impose a boycott against US electronic products amid an ongoing and deepening rift between the two North Atlantic Treaty Organisation allies over a number of issues.

Erdogan has ruled out the possibility of higher interest rates, which can slow economic growth, but independent analysts say higher rates are urgently needed to stabilise the country's currency.

Yet he remained optimistic, saying "it is not at all like we sank and we are finished.The dynamics of the Turkish economy are solid, strong and sound and will continue to be so".

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The threat to the lira, the stock market and the economy has drawn a sharp reaction from Erdogan, who has promised to look for new economic friends, including among traditional U.S. adversaries. "We fail to see how the crisis can be resolved without external support", but an International Monetary Fund support package will be hard "given Turkey's current political situation".

But helping Turkey to circumvent the U.S. sanctions would likely further provoke the USA, which could respond with yet harsher measures against China, Yao added.

"As with any loan or bond issue, there is always the chance of default, and that risk would be particularly high when a country is at the eye of the storm", he said. "This is called carrying out an operation against Turkey".

Turkey's lira pulled back from a record low to the dollar in morning trading after the central bank pledged to provide liquidity and cut reserve requirements for Turkish banks, but the currency's meltdown is still a major worry for emerging markets and beyond. He also urged manufacturers not to rush to buy dollars. "You should know that to keep this nation standing is. also the manufacturers" duty". Still, Erdogan indicated he was in no mood to offer concessions to the United States, or to financial markets.

Speaking at a symposium organized by the Foundation for Political, Economic and Social Research (SETA) in the capital Ankara, Erdoğan said: "For each product we buy from overseas with foreign currencies, we will manufacture better ones and sell them overseas".

"Some close the doors and some others open new ones", added Erdogan, who has built closer ties over the last few years with countries from Latin America, Africa and Asia.

The Turkish envoy conveyed the message the pressure and threats would only lead to a "chaos" in relations which could only improve after Washington abandons the language of "threats", Cavusoglu said. "We will make those spreading speculations pay the necessary price", he said.

Mr Brunson has denied charges of espionage, but faces up to 35 years in jail if found guilty.

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