Turkey flags boycott of US electronics as currency row grows

Turkey’s president has appeared to escalate a dispute with the United States that has helped spark a Turkish currency crisis.

Recep Tayyip Erdogan claimed his country would boycott Us-made electronic goods.

Addressing a conference of his ruling party faithful in the capital, Mr Erdogan added fuel to the spat with America even as local business groups called on his government to settle the dispute through talks.

Investors seemed to look through the fiery rhetoric, pushing the lira off record lows on confirmation Turkish and US government officials met on Monday.

“We will implement a boycott against America’s electronic goods,” Mr Erdogan told the conference. He suggested Turks would buy local or Korean phones instead of Us-made iphones, though it was unclear how he intended to enforce the boycott.

The move is seen as retaliation for America’s decision to sanction two Turkish ministers over the detention of an American pastor on terrorrelated charges and to double tariffs on Turkish steel and aluminium imports.

Behind the scenes, however, diplomatic dialogue appears to have resumed. Turkey’s state-run news agency and US officials say US national security adviser John Bolton had met with the Turkish ambassador to Washington on Monday.

That helped ease the turmoil in financial markets, with the Turkish lira stabilising near record lows.

The currency was up 5 per cent yesterday at about 6.55 per US dollar, having fallen 42 per cent so far this year. Most of those losses came in recent weeks.

Investors are worried not only about Turkey’s souring relations with the US – a longtime Nato ally – but also Mr Erdogan’s economic policies and the country’s high debt accumulated in foreign currencies.

Independent economists say Mr Erdogan should let the central bank raise interest rates to support the currency, but he wants low rates to keep the economic growth going.

In a joint statement issued yesterday, the industrialists’ group TUSIAD and the Union of Chambers and Commodity Exchanges called on the government to allow the central bank to raise interest rates to help overcome the currency crisis.

The business groups also urged diplomatic efforts with the US and an improvement in relations with the European Union, which is Turkey’s major trading partner.

The finance chief is due to address hundreds of foreign investors tomorrow in a teleconference, the state-run Anadolu Agency said.

Russian foreign minister Sergey Lavrov voiced support for Turkey during a joint news conference with his Turkish counterpart in Ankara, saying the US’S increased use of sanctions would erode the dollar’s role as the top reserve currency.

Mr Lavrov said that the wide use of sanctions reflected Washington’s desire to win domination and secure unilateral advantages for its businesses.