Qatar pledges $15bn to Turkey, helping lira extend rebound

Alicia Cross
August 16, 2018

In response to Trump's tariffs, Turkish officials said they will impose a 50 percent tax on US rice, 140 percent on spirits, 60 percent on tobacco and 120 percent on cars while increasing duties on a variety of other goods.

Turkey doubled tariffs on some USA imports, including alcohol, cars and tobacco on Wednesday in retaliation for US moves, while the lira rallied further after the central bank's liquidity moves had the effect of supporting the currency.

Turkey's national currency, the lira, has tumbled by almost 40% against the U.S. dollar so far this year.

In recent days, Qatari supporters of Turkey have begun a public campaign in Doha to change their riyals into lira in an attempt to shore up the plunging Turkish currency.

Erdogan also renewed a call for Turks to convert their dollars into the lira, to help strengthen the currency.

The tariffs come a day after Erdogan said Turkey would boycott US electronic goods, singling out iPhones. He suggested Turks would buy local or Korean phones instead, although it was unclear how he meant to enforce the boycott.

"Qatar has pledged $15 billion of direct investments in Turkey", presidential spokesman Ibrahim Kalin wrote on Twitter. Turkey and the United States have different interests and priorities.

Turkey entered into an understanding to the Russian defense system despite being a North Atlantic Treaty Organisation ally, and has been increasingly cozying up to Russian President Vladimir Putin, alarming both the USA and EU.

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Kalin also told a news conference on Wednesday that Turkey will take a positive stance towards trading in national currencies to escape from United States dollar pressure.

Economists are warning that if confidence isn't restored quickly, Turkey could lurch into a recession and debt crisis requiring a bailout from the International Monetary Fund.

In the wake of USA sanctions on Turkey, President Recep Tayyip Erdogan reached out to German Chancellor Angela Merkel to point out that it's in Germany's interest for Turkey to have a strong economy.

State-run Anadolu Agency quoted Trade Minister Ruhsar Pekcan as saying: "We have responded to the sanctions with $533 million dollars of extra tax".

An evangelical from North Carolina, he has been held in Turkey for almost two years over alleged links to the outlawed Kurdistan Workers Party and the Gulenist movement, which Turkey blames for a failed coup in 2016.

The 50-year-old pastor is now being tried on espionage and terror-related charges. "After the spike of the us dollar, prices of foreign products have increased dramatically and the consumer has no purchasing power".

"We've seen no evidence that Pastor Brunson has done anything wrong and we believe he is a victim of unfair and unjust detention by the government of Turkey", White House Press Secretary Sarah Sanders said at the time.

The Kremlin said the same day that Russian Federation favored bilateral trade with all countries in their national currencies, rather than the dollar, but that the idea needed detailed work before being implemented.

Other reports by Free-Prsite

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