Wednesday, 20 October 2021

Currency crisis in Turkey – Qatar offers aid to Ankara

Anadolu Agency © – File

ISTANBUL: The United States on Wednesday ruled out removing steel tariffs that have contributed to a currency crisis in Turkey even if Ankara frees a U.S. pastor, as Qatar pledged $15 billion in investment to Turkey, supporting a rise in the Turkish lira.

The White House stance appeared to give Turkish authorities little incentive to work for the release of Andrew Brunson, a pastor on trial in Turkey on terrorism charges and whose case Turkish officials have said was a matter for the courts.

The dispute is one of several between the NATO allies, including diverging interests in Syria and U.S. objections to Ankara’s ambition to buy Russian defense systems, that have contributed to instability in Turkish financial markets.

While the Brunson matter appeared far from being resolved, Turkish President Tayyip Erdogan got a shot in the arm from Qatar’s Emir, who approved a package of economic projects, investments and deposits after the two met in Ankara.

The Qatari money will be channeled into banks and financial markets, a Turkish government source told Reuters.

The move by Turkey’s Gulf ally offered further support to a lira rally after the Turkish central bank tightened liquidity and curbed selling of the currency.

Lira has lost around 40% against the US dollar this year, due to worries over Erdogan’s growing control over the economy and his repeated calls for lower interest rates despite high inflation.

The dispute with the United States, focused on a tit-for-tat tariff row and Turkey’s detention of Brunson, helped turn the currency’s steady decline into meltdown.

It touched a record low of 7.24 to the dollar early on Monday, rattling global stock markets and threatening the stability of Turkey’s financial sector.

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