Erdogan says Turkey will boycott US electronics, lira steadies

ISTANBUL: President Tayyip Erdogan said that Turkey would boycott electronic products from the United States, retaliating in a row with Washington that helped drive the lira to record lows.

The lira has lost more than 40 per cent this year and crashed to an all-time low of 7.24 to the dollar on Monday, hit by worries over Erdogan’s calls for lower borrowing costs and by worsening ties with the United States, its NATO ally.

The lira’s weakness has rippled through global markets.

Its drop of as much as 18 per cent on Friday hit European and US stocks as investors fretted about banks’ exposure to Turkey.

On Tuesday the lira recovered some ground, trading at 6.3300 to the dollar at 1947 GMT, up some nine per cent from the previous day’s close and having earlier touched 6.2995.

It was supported by news of a planned conference call on Thursday in which the finance minister will seek to reassure investors concerned by Erdogan’s influence over the economy and his resistance to interest rate hikes to tackle double-digit inflation.

Erdogan says Turkey is the target of an economic war, and has made repeated calls for Turks to sell their dollars and euros to shore up the national currency.

“Together with our people, we will stand decisively against the dollar, forex prices, inflation and interest rates. We will protect our economic independence by being tight-knit together,” he told members of his AK Party in a speech.

The United States has imposed sanctions on two Turkish government ministers over the trial on terrorism charges of US evangelical pastor Andrew Brunson in Turkey, and last week Washington raised tariffs on Turkish metal exports.

The White House said on Tuesday President Donald Trump was frustrated that Turkey had not released Brunson.

“The president has a great deal of frustration on the fact that Pastor Brunson has not been released as well as the fact that other US citizens and employees of diplomatic facilities have not been released,” White House Press Secretary Sarah Sanders told a briefing.

A White House official said the United States was warning more economic pressures may be in store for Turkey if it refuses to release Brunson.

It was unclear whether Erdogan’s call for Turks to sell dollars would be widely heeded, but a Turkish news agency said traders in Istanbul’s historic Eminonu district converted US$100,000 into lira on Tuesday.

Chanting “Damn America”, they unfurled a banner saying “we will win the economic war”, the Demiroren agency said.

Amid calls to ‘burn’ the dollars, the group headed to a bank branch where they converted the money, it said.

Erdogan also said Turkey was boycotting US electronic products.

“If they have iPhones, there is Samsung on the other side, and we have our own Vestel here,” he said, referring to the Turkish electronics company, whose shares rose 5 per cent.

His call met a mixed response on Istanbul streets. — Reuters