Turkey’s lira steadies amid Erdogan’s move to boycott U.S. electronic products

Wednesday, 15 Aug, 2018

Erdogan said his government would offer further incentives to companies planning to invest in Turkey and said firms should not be put off by economic uncertainty.

President Recep Tayyip Erdogan announced Turkey's latest salvo Tuesday, saying his country will boycott US -made electronic goods and turn to other manufacturers including South Korea's Samsung or Turkey's Vestel.

Erdogan said the nation of 80 million people would stop buying American electronics, condemning the "explicit economic attack" against his country. "If they have iPhone, the other side has Samsung". He suggested Turks would buy local or Korean phones instead of US-made iPhones, though it was unclear how he meant to enforce the boycott.

Turkey's economic crisis boils down to heavy reliance on foreign investments made in dollars, while Turkish assets are valued in lira, and the lira has been declining at an alarming rate (although it appeared to stabilize somewhat on Tuesday).

USA national security adviser John Bolton on Monday met Turkey's ambassador to the United States to discuss Brunson's detention.

Neither the White House, Turkey's Ministry of Foreign Affairs nor Apple immediately responded to a request for comment.

In response to the sanctions, Erdogan has been urging local citizens to trade their USA currency for the lira, and to buy domestically-produced goods.

Erdogan described USA sanctions as an "economic attack" doomed to fail because "Turkey has one of the most solid banking systems in the world in all respects".

Hovenier also noted that the U.S.is demanding the resolution of several other US citizens' cases, including NASA astronaut Serkan Golge, convicted of being a member of a terrorist organization in February "without credible evidence", according to the State Department, and of three Turkish citizens who work for the USA mission and have been detained for months.

US and global markets fell on Friday and Monday, reflecting concerns that Turkey's problems could spread.

The US reports retail sales and new housing construction numbers. "In the days to come, we will see a more powerful lira", he said. Brunson and his supporters have firmly denied the charges.

The economic crisis that has developed in Turkey has added to the concerns about the dual impact of escalating global trade tensions and a stronger United States dollar on emerging market economies. Its drop of as much as 18% on Friday hit European and U.S. stocks as investors fretted about banks' exposure to Turkey.

Since January, the Turkish lira has lost more than 34 percent of its value against the dollar, pushing up the price of everyday items. In response, U.S. President Donald Trump last week announced plans to double tariffs on imports of Turkish steel and aluminum.

U.S. Charge d'Affaires Jeffrey Hovenier talks to members of the media after visiting United States pastor Andrew Brunson, who is being held under house arrest in Izmir, Turkey, Aug. 14, 2018.

'They don't hesitate to use the economy as a weapon, ' he said.

"We will boycott electronic goods from the United States", the president said, raising the stakes in a spat with Washington following the detention of U.S. pastor Andrew Brunson on terror-related charges.

When Erdogan didn't release the prisoner, merely shifting him to house arrest from jail, Trump struck with sanctions that tanked the lira.

Relations between Turkey and the United States have been soured by Brunson's detention, as well as diverging interests on Syria.