Erdogan says Turkey will boycott U.S. electronics, lira steadies

[webfact]

Erdogan says Turkey will boycott U.S. electronics, lira steadies

By Daren Butler and Behiye Selin Taner

 

Businessmen holding U.S. dollars stand in front of a currency exchange office in response to the call of Turkish President Tayyip Erdogan on Turks to sell their dollar and euro savings to support the lira, in Ankara, Turkey August 14, 2018. REUTERS/Umit Bektas

 

ISTANBUL (Reuters) - President Tayyip Erdogan said on Tuesday that Turkey would boycott electronic products from the United States, retaliating in a row with Washington that has helped drive the lira to record lows.

 

The lira has lost more than 40 percent this year and crashed to an all-time low of 7.24 to the dollar on Monday, hit by worries over Erdogan's calls for lower borrowing costs and by worsening ties with the United States, a major NATO ally.

 

The lira's weakness has rippled through global markets. Its drop of as much as 18 percent on Friday hit European and U.S. stocks as investors fretted about banks' exposure to Turkey.

 

On Tuesday the lira recovered some ground, trading at 6.3300 to the dollar at 1947 GMT, up some 9 percent from the previous day's close and having earlier touched 6.2995.

 

It was supported by news of a planned conference call on Thursday in which the finance minister will seek to reassure investors concerned by Erdogan's influence over the economy and his resistance to interest rate hikes to tackle double-digit inflation.

 

Erdogan says 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 national currency.

 

"Together with our people, we will stand decisively against the dollar, forex prices, inflation and interest rates. We will protect our economic independence by being tight knit together," he told members of his AK Party in a speech.

 

The United States imposed sanctions on two Turkish government ministers over the trial on terrorism charges of U.S. evangelical pastor Andrew Brunson in Turkey, and last week Washington raised tariffs on Turkish metal exports.

 

State Department spokeswoman Heather Nauert said Turkey's economic woes were not started by U.S. sanctions.

 

"Economists would certainly tell you that what is happening in Turkey goes far beyond the United States' recent policies and imposition of various policies," Nauert told a press briefing.

 

TRUMP FRUSTRATED

The White House said on Tuesday President Donald Trump was frustrated that Turkey had not released Brunson.

 

"The president has a great deal of frustration on the fact that Pastor Brunson has not been released as well as the fact that other U.S. citizens and employees of diplomatic facilities have not been released," White House Press Secretary Sarah Sanders told a briefing.

 

A White House official said the United States was warning more economic pressures may be in store for Turkey if it refuses to release Brunson.

 

It was unclear whether Erdogan's call for Turks to sell dollars would be widely heeded, but a Turkish news agency said traders in Istanbul's historic Eminonu district converted $100,000 into lira on Tuesday.

 

Chanting "Damn America", they unfurled a banner saying "we will win the economic war", the Demiroren agency said. Amid calls to "burn" the dollars, the group headed to a bank branch where they converted the money, it said.

 

Erdogan also said Turkey was boycotting U.S. electronic products. "If they have iPhones, there is Samsung on the other side, and we have our own Vestel here," he said, referring to the Turkish electronics company, whose shares rose 5 percent.

 

His call met a mixed response on Istanbul streets.

 

"We supported him with our lives on July 15," shopkeeper Arif Simsek said, referring to a failed 2016 military coup. "And now we will support him with our goods. We will support him until the end."

 

But shopkeeper Umit Yilmaz scoffed. "I have a 16-year-old daughter. See if you can take her iPhone away ... All these people are supposed to not buy iPhones now? This can't be."

 

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.

 

"If we postpone our investments, if we convert our currency to foreign exchange because there's danger, then we will have given in to the enemy," he said.

 

ECONOMIC PAIN

Although the lira gained some respite on Tuesday, investors say measures taken by the central bank on Monday to ensure liquidity failed to address the root cause of lira weakness.

 

"What you want to see is tight monetary policy, a tight fiscal policy and a recognition that there might be some short-term economic pain - but without it there's just no credibility of promises to restabilise things," said Craig Botham, Emerging Markets Economist at Schroders.

 

Dollar-denominated bonds issued by selected Turkish banks continued to fall on Tuesday, although sovereign bonds steadied.

 

U.S.-Turkish relations have been hurt by a series of issues from diverging interests in Syria, Ankara's plan to buy Russian defence systems and the detention of pastor Brunson.

 

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

 

Following the meeting, U.S. officials have given no indication that the United States has been prepared to give ground in the standoff between the two countries' leaders.

 

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

 

Brunson's lawyer said on Tuesday he had launched a fresh appeal to a Turkish court for the pastor's release.

 

(Additional reporting by Ece Toksabay in Ankara, Ezgi Erkoyun in Istanbul and Steve Holland and Lesley Wroughton in Washington; writing by Humeyra Pamuk and Dominic Evans; editing by Gareth Jones and James Dalgleish)

 

-- © Copyright Reuters 2018-08-15

[Get Real]

2 hours ago, webfact said:

Businessmen holding U.S. dollars stand in front of a currency exchange office in response to the call of Turkish President Tayyip Erdogan on Turks to sell their dollar and euro savings to support the lira

Just looking at the picture, and using common sense.

* The people that are standing in the picture are supposed to represent turkish businessmen. Now we know that they have all their dollars in hand, and never use a bank account.

 

* In Turkey, the businessmen follow their leader, and the government when it comes to supporting a currency. They never look at their own interest of high yields on their investments.

[Tchooptip]

"Businessmen" with two banknotes in the hand, is it sure they do not do figuration? Not for me!

[puipuitom]

The problem with the Turkish autorities is, they do not know how to handle money and their economy.

In Feb 1999 1 € = 382.505 Turkish Lira. End of 2001 1/1.292.245, an increase of 338%(!). Seen the many 000, they decided to drop 6x0’s, and ended 1 Jan 2005 at 1 € = 1,81 TL.

Last Monday afternoon the fall was stopped every time just before 1 € = 7,99 TL. Tuesday at 7,35 and Wed 15 Aug 10:35 MET at just under 7. Only ONE organisation has the power and the reason to do so: the ECB, to protect EU banks from further damage caused by a default of the financial genius in Ankara.

Remind: EU banks have US$ 224 BILLION outstanding in Turkey, e.g. the Spanish 83 B, French 38 B, Italian 17 B, all banks with financial trouble themselves.

The trade deficit: “Turkey’s foreign trade balance showed a $27.4 billion deficit from January to April 2018, a yearly increase of 56.2 percent, the country’s statistical authority announced on May 31”. see http://www.hurriyetdailynews.com/turkeys-trade-deficit-grows-in-first-four-months-132638

The foreign debt: “Turkey’s gross external debt stock stood at $466.67 billion, more than half of its gross domestic product (GDP) - 52.9 percent - at the end of March 2018”, the Treasury announced on June 29, see http://www.hurriyetdailynews.com/turkeys-external-debt-stock-reaches-466-7-billion-in-first-quarter-133976

 All NOT coming from liars and swindlers abroad, but TURKISH governmental info in Turkish newspapers

So, nothing economic miracle, but pumped foreign financial air in a Turkish balloon

[pookiki]

The US still makes electronic products???

[scoutman360]

U.S. and all other stock markets are over-reacting. The impact on global trade is incidental. As usual, my retirement fund suffers from over-emotional people.

[JemJem]

Of course, the people in that photo are unlikely to be major businessmen, folks ?

 

This is not a detailed video; but, the guy makes good, important points :

 

https://www.ctvnews.ca/video?clipId=1462718&playlistId=1.4049019&binId=1.810401&playlistPageNum=1&binPageNum=1#_gus&_gucid=&_gup=twitter&_gsc=uVhg36L

[bristolboy]

16 hours ago, scoutman360 said:

U.S. and all other stock markets are over-reacting. The impact on global trade is incidental. As usual, my retirement fund suffers from over-emotional people.

Actually not. The danger is that certain large European banks have lent heavily in Euro-denominated loans to private Turkish parties. It's unlikely that these banks will be paid back. Hence there is a real danger of a financial collapse in Europe. What's more there is no way that the EU can force the Turkish government to assume responsibility for loans made to private parties. Which is what the Eurozone administration did to Spain and Ireland.