President Erdogan sees Turkey as a target of economic war
ISTANBUL: President Tayyip Erdogan denied that Turkey is in a currency crisis, dismissing a plunge in the lira as “fluctuations” which have nothing to do with economic fundamentals.
Speaking after US President Donald Trump doubled tariffs on Turkish steel and aluminium imports, Erdogan described Friday’s 18% fall in the lira to a record low as the “missiles” of an economic war waged against Turkey.
Erdogan said those who plotted against Turkey in a failed coup attempt in July 2016 were now trying to target the country through its economy, and pledged to fight back. He did not name any countries. “Those who can’t compete with us on the ground have brought online fictional currency plots that have nothing to with the realities of our country, production and real economy,” Erdogan told a provincial meeting of his AK Party in the Black Sea coastal town of Rize. “The country is neither crumbling, nor being destroyed or bankrupt or in a crisis,” he said, and added that the way out of the ‘currency plot’ was to boost production and “minimise interest rates”.
The Turkish lira has lost about 40% this year alone, largely over worries about Erdogan’s influence over the economy, his repeated calls for lower interest rates in the face of high inflation and deteriorating ties with the United States.
The two governments have been at odds over a wide range of topics – from diverging interests in Syria, to Turkey’s ambition to buy Russian defence systems, and the case of evangelical pastor Andrew Brunson, who is on trial in Turkey on terrorism charges.
Erdogan also appeared to allude to a ‘deadline’ for handing over Brunson, although he did not name the United States as having set any such deadline or say precisely when it might have expired. ”(They are) threatening, saying you will send (him) until 6 pm... This is not some random country. This is Turkey,” he said.
A Turkish delegation visited Washington for talks this week but left with no signs of a breakthrough.
After almost 20 months in a Turkish jail, Brunson was moved to house arrest in July by a court. Since then Trump and his vice president Mike Pence have repeatedly called for his release while Ankara said the decision was up to the courts.
Washington in response sanctioned two Turkish ministers and Trump on Friday announced it was doubling the tariffs on steel and aluminium imports from Turkey, saying relations with Ankara were ”not good at this time”.
An important emerging market, Turkey borders Iran, Iraq and Syria and has been mostly pro-Western for decades. Financial upheaval risks further destabilising an already volatile region.
A meeting on Friday unveiling a new economic approach by Turkey’s finance minister Berat Albayrak, Erdogan’s son-in-law, did little to offer support for the free-falling lira as investors sought concrete steps such as an interest rate increase to restore confidence.