Erdogan vows action against 'economic terrorists' over lira plunge

Merkel And Erdogan Mark 50 Years Of Turkish Immigration

Investors seemed to look through the fiery rhetoric, pushing the lira off record lows on reports that Turkish and USA government officials held talks on Monday.

Ankara has repeatedly said the Brunson case was up to the courts and a Turkish judge moved Brunson from jail to house arrest in July.

Turkey's lira fell sharply on Friday after U.S. President Donald Trump threatened to double tariffs in retaliation for failing to release pastor Andrew Brunson.

"It's another Manic Monday", said Jordan Rochester, a currency strategist at Nomura International in London.

Erdogan has not backed down over the rift with the USA and has used the ensuing crisis to his advantage by blaming it on a foreign conspiracy, telling party members in the city of Trabzon on Sunday: "The aim of the operation is to make Turkey surrender in all areas from finance to politics".

A bigger danger is that Turkey's crisis will spill over into other emerging market economies and there were signs on Monday that other countries seen as vulnerable were coming under speculative attack.

Turkey's weakened currency, the lira, plunged by a full 20% in response.

The Turkish president's standoff with Trump has fuelled concerns of a foreign policy shift that would result in Turkey leaving North Atlantic Treaty Organisation, forging stronger political links with Russia, China and Iran, and allowing the three million Syrian refugees living in Turkey to leave for the EU. In particular, the report flags that Spain's BBVA, Italy's UniCredit and France's BNP Paribas, all of which have significant operations in Turkey, are especially exposed.

President Recep Tayyip Erdogan on Tuesday said Turkey would boycott U.S. electronic goods like the iPhone in retaliation for punitive sanctions from Washington, as the Turkish lira finally clawed back some ground after going into a tailspin over the tensions.

Mr Erdogan suggested Turkey would stop procuring US-made iPhones and buy Korean Samsung or Turkish-made Vestel devices instead.


"They don't hesitate to use the economy as a weapon", he said. President Recep Tayyip Erdogan, an opponent of interest rates who has wielded more influence over Turkey's central bank this year, continued to blame the sell-off on external forces like Washington.

A currency crisis blew up last week in the Turkish lira on investor concerns over Prime Minister Tayyip Erdogan's increasing control over the economy and deteriorating relationship with the United States.

The iPhone is among the USA electronic good that could be barred from Turkey as part of a new boycott announced by the country's president on Tuesday. The central bank, guided by the government, refused to raise interest rates to curb inflation and the drop in the Turkish Lira.

'We will boycott USA electronic goods, ' Erdogan said in a televised speech, raising the stakes in a spat that has seen the Turkish lira plunge to record lows.

But the bank did not increase interest rates, which would help contain inflation while supporting the lira.

Mr Erdogan also renewed a call for Turks to convert their dollars into the Turkish lira, to help strengthen the country's currency which has lost 40% in value this year.

The lira's plunge - which had been ongoing for weeks - was turned into a rout on Friday when US President Donald Trump tweeted that Washington was doubling aluminium and steel tariffs for Turkey. Even so, the peso hit a record low.

The currency has been steadily declining for the past year.

Treasury and Finance Minister Berat Albayrak, son-in-law of Erdogan, will speak with about 1,000 foreign investors on Thursday via a teleconference, the private NTV broadcaster said.

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