Qatar throws Turkey a lifeline as spat widens with US

Shoppers at an Egyptian Bazaar in Istanbul. Buying power for tourists has soared in Turkey

Tariffs have been doubled on goods including cars, tobacco, and alcohol, while coal, rice, and cosmetic products have also been hit by increases.

Turkey's vice president said the retaliatory tariffs are a response to "the deliberate attack of the USA administration on [Turkey's] economy".

The lira yesterday traded at 6.4125 to the United States dollar, weakening from a close of 6.3577 a day earlier.

It appears that the morning's move was triggered by the introduction of new rules by the BDDK - Turkey's banking watchdog - which, according to a Reuters report, has cut "the limit for Turkish banks' forex swap, spot and forward transactions with foreign banks to 25 percent of a bank's equity".

A treasury desk trader at one bank said this "development showed relations with the European Union could recover while tense relations continue with the USA".

The currency has lost almost 40 percent against the dollar this year, driven by worries over Erdogan's growing influence on the economy and his repeated calls for lower interest rates despite high inflation.

"Every product that we buy in foreign currency from outside, we will produce them here and sell overseas", Erdogan said in a speech, according to The New York Times.

The lira had already rebounded about 8 percent on Tuesday on news of a planned conference call on Thursday in which the finance minister will seek to reassure global investors.




US President Donald Trump with Turkish President Recep Tayyip Erdogan in the Roosevelt Room of the White House on May 16, 2017. Mr Erdogan has also held a phone call with German chancellor Angela Merkel and planned to speak this week also with France's Emmanuel Macron.

Washington has imposed financial sanctions on two Turkish ministers and doubled steel and aluminium tariffs on Turkey, as USA president Donald Trump tries to secure the release of Andrew Brunson, a 50-year-old American pastor being tried in Turkey on espionage and terrorism-related charges.

Turkey has secured a $15 billion investment from Qatar that could bolster its economy amid a widening dispute with the United States.

On Wednesday, a court rejected an appeal for Mr Brunson's release from detention and for a travel ban against him to be lifted, the state-run Anadolu Agency reported.

The evangelical pastor, who is originally from Black Mountain, North Carolina, has lived in Turkey for 23 years and led the Izmir Resurrection Church.

Apple has 22 per cent of the smartphone market in Turkey, where 11.4 million units were sold a year ago, according to Ramazan Yavuz, research manager at IDC consultancy company.

Erdogan has said that Turkey is the target of an economic war and has made repeated calls for Turks to sell their dollars and euros to shore up the currency.

US sanctions imposed on Turkey are shattering the former's reputation, Turkish Foreign Minister Mevlut Cavusoglu said.

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