Turkish lira resumes fall after Trump sanctions threat

Turkish lira resumes fall after Trump sanctions threat

Turkish lira resumes fall after Trump sanctions threat

U.S. President Donald Trump on Friday said the United States was not going to take Turkey's detention of U.S. Christian pastor Andrew Brunson "sitting down", a day after his Treasury chief said Washington could hit Ankara with further sanctions.

Brunson, 50, was indicted by a Turkish court on charges of having links with the Kurdistan Workers' Party (PKK) militant group and the movement of the US-based opposition cleric Fethullah Gulen, whom Ankara accuses of having masterminded the July 2016 coup attempt against Erdogan.

Erdogan said that Turkey would never bow before those "who set up their own order by exploiting the world". In a telephone call on Friday, Finance Minister Berat Albayrak and his French counterpart Bruno Le Maire discussed USA sanctions against Turkey and cooperation between their countries, Albayrak's ministry said. He also said on Friday that he had ordered to double United States tariffs on Turkish aluminum and steel imports to 20 percent and 50 percent, respectively.

The lira has lost almost 40 per cent against the United States dollar this year, driven by worries over Mr Erdogan's growing control over the economy and his repeated calls for lower interest rates despite high inflation.

Fitch Ratings had earlier said the absence of an orthodox monetary policy response to the lira's fall, and the rhetoric of Turkish authorities, had "increased the difficulty of restoring economic stability and sustainability". After the USA imposed tariffs and sanctions, Turkey fired back with tariffs of its own on a variety of goods, including cars.

Pastor Andrew Brunson's fate is important to evangelical voters in the looming midterm elections in November, so Washington may impose more sanctions on allied Ankara, a former Turkish envoy to the USA says.

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The US has already imposed sanctions on two Turkish government ministers and doubled tariffs on Turkish steel and aluminium imports.

The Turkish president emphasized Turkey's determination to eliminate all threats from Syria and Iraq. Erdogan previously suggested a swap in which Brunson is released in exchange for Gulen, though US officials have said Turkey must present convincing evidence for any extradition proceeding to be considered. "Would the amount of Turkey's debts decrease?"

Despite the political tensions, the lira rebounded some 6 percent on Wednesday, strengthening to around 6.0 to the U.S. dollar. At the congress, President Erdogan was re-elected as head of the party.

The fight between Turkey and the US has escalated in recent weeks, with Brunson's detainment as a flashpoint. He criticized Turkey for "holding our wonderful Christian Pastor".

The Turkish lira has plunged to record lows in recent weeks over an unprecedented spat with North Atlantic Treaty Organisation ally the United States over the detention of an American clergyman, Andrew Brunson, charged with espionage and terrorism. "We will pay nothing for the release of an innocent man, but we are cutting back on Turkey!" he tweeted.

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