Asian stock markets recover from the escalating financial crisis in Turkey

Alicia Cross
August 15, 2018

Behind the scenes, however, diplomats resumed contact to ease tensions.

Trump's announcement came shortly after Erdogan called on Turks to help defend the country against the US-launched economic war on his nation.

"We, as the Turkish Airlines, stand by our state and our people".

"We will impose a boycott on United States electronic products", Turkey's President Recep Tayyip Erdogan said in a televised speech.

Erdogan, however, did not announce any government action towards a boycott.

On Sunday, the German minister had criticized U.S. President Donald Trump's decision to impose additional tariffs on Turkey.

Behind the scenes, however, diplomatic dialogue appears to have resumed.

Turkey's ambassador to Washington Serdar Kilic held talks with U.S. national security advisor John Bolton in a meeting which Ankara said was arranged by the White House.

Shortly after, United States sanctions citing Brunson's detention created a ideal storm of economic conditions in Turkey that's seen the lira down more than 45% against the dollar so far this year, despite a slight rally on Monday.

The countries are embroiled in a diplomatic row sparked by the case of USA evangelic pastor Andrew Brunson, which Turkey wants to try on terrorism charges believing he was behind the attempted coup on Erdogan two years ago.

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In response to the sanctions, Erdogan has been urging local citizens to trade their USA currency for the lira, and to buy domestically-produced goods.

World share markets rebounded on Tuesday as Turkey's lira pulled out of a recent nosedive and reassuring data from Germany helped offset the latest wobbles in China's giant economy.

The Trump administration punished Turkey with economic sanctions and traffic hikes over the detention of an American Christian pastor standing trial on disputed terrorism charges. It was not clear when the court would consider the appeal.

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

Some 1,000 foreign investors, particularly from the United States, Europe and the Middle East, are expected to join the meeting, which is scheduled to be held at 4 p.m. Istanbul time.

Sources familiar with the U.S. president's thinking assert he is determined to keep up pressure with little regard for the impact on over half a century of strategic ties with Turkey. That opinion is not shared by global financial analysts, who worry Turkey's economy is so weak and dependent on foreign money that American tariffs could trigger a collapse that drags European markets down.

Independent economists caution it would be hard to unseat the dollar as the top reserve currency as it is used widely in the global economy, for example to trade in oil and for commercial deals.

Turkey will "start looking for new friends and allies" if Washington maintains its "misguided notion that our relationship can be asymmetrical", he said, adding: "The most important thing is breaking the hands firing these weapons". "Meanwhile, the Kurds remain a reality near and within Turkey's borders; a deepening economic crisis makes it increasingly vulnerable; and its erratic regional policy makes it hard to pursue any dialogue that requires trust and steadfastness".

Erdogan on Tuesday maintained that Turkey's economy was under attack and that the currency turmoil did not reflect its strength.

Other reports by Free-Prsite

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