Turkey woos allies amid US standoff, battered lira
PRESIDENT Recep Tayyip Erdogan has moved to shore up alliances in Europe and the Middle East, easing pressure on the battered lira, as the US-Turkey standoff deepened.
Efforts to rally support and bolster domestic markets include a call between Turkish Finance Minister Berat Albayrak and international investors. Erdogan was set to speak with French President Emmanuel Macron yesterday, a day after talks with German Chancellor Angela Merkel and a $15 billion (R217bn) pledge of support from Qatar.
The lira climbed for a third day along with emerging-market currencies even after the White House said new tariffs on Turkish goods would remain regardless of whether Andrew Brunson, an American pastor detained in Turkey, was freed.
“The bigger issue for markets is this constant politicisation of economic and financial issues,” said Mohieddine Kronfol, the Dubaibased chief investment officer at Franklin Templeton Investments.
Erdogan’s overtures to Europe suggest he’s prepared to mend ties strained by past diplomatic clashes – he accused Merkel’s government of engaging in “Nazi practices” last year – in an attempt to weather the US pressure. The pledge by Qatar rewards the president for standing by the gas-rich Gulf country against a Saudi-led boycott backed by President Donald Trump.
The lira, one of the world’s worst-performing currencies this year, advanced 2% to 5.8268 per dollar at 11.45am in Istanbul, paring its loss for the year to about 35%.
Brunson’s plight has dominated the Trump administration’s strategy toward its Nato ally. Turkey says he had links to a failed 2016 coup.
Erdogan said the standoff would push Turkey to forge other alliances.
Investors and analysts say the support from the likes of Qatar will help Turkey buy time but doesn’t replace the need for action to contain double-digit inflation and a mass of foreign-currency debt. – Bloomberg