Wednesday, 14 November 2018

US threatens more Turkey sanctions if pastor not freed

WASHINGTON: Treasury Secretary Steve Mnuchin warned the United States would levy more sanctions on the troubled Turkish economy if Ankara does not soon release a jailed American pastor.

Deepening a spat that has rattled financial markets and threated to split a long-standing defense and political alliance, Mnuchin suggested the next spiral of tit-for-tat sanctions was coming soon.

“We have put sanctions on several of their cabinet members,” Mnuchin told President Donald Trump in a cabinet meeting attended by the press, including AFP. “We have more that we are planning to do if they don’t release him quickly.”

Trump prefaced Mnuchin’s remarks by saying that Turkey had not been a very good friend to America.

Referring to imprisoned pastor Andrew Brunson, Trump said “they have a great Christian pastor there, he’s a very innocent man.”

The threat comes as Turkey sought to reassure investors rattled by the sanctions-fueled crash of the Turkish lira, insisting the country would emerge stronger.

Finance Minister Berat Albayrak, the son-in-law of President Recep Tayyip Erdogan, addressed hundreds of foreign investors from the United States, Europe and Asia via a conference call in a bid to soothe the markets.

The lira has clawed back some ground over the last two days – after losing almost a quarter of its value on Friday and Monday – but economists are warning that Turkey must urgently address its economic imbalances to avoid more troubles ahead.

“Turkey will emerge stronger from these (currency) fluctuations,” Albayrak was quoted by state-run TRT television as saying during the conference call.

Albayrak rejected seeking a bailout from the IMF, an option never seen as likely given that Erdogan often boasts of paying off Turkey’s past IMF debts in May 2013.

The lira, which earlier this week traded at well over seven to the dollar, held onto its gains during Albayrak’s discussion, trading at 5.7 against the greenback.

“We will turn this crisis into an opportunity,” said Erdogan’s spokesman Ibrahim Kalin after a cabinet meeting chaired by the president, saying measures taken so far had helped bring about a “rapid improvement process” over the last two days.

‘Not fast enough’

But Albayrak, who was appointed last month in a largely unexpected move, will have a tough time restoring order to an economy plagued by high inflation and a current account imbalance.

The lira’s months-long slide has accelerated as a result of the diplomatic standoff with Washington over Brunson’s detention. A Trump tweet on Friday announcing a doubling of aluminum and steel tariffs for Turkey triggered the rout in the currency markets.

The lira’s drop in value is certain to further fuel inflation, which is already near 16 percent.

Albayrak said there would be no concessions on fiscal discipline, adding: “We are targeting lowering inflation into the single digits as soon as possible.”

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