President Erdogan says crash of lira ‘political plot’ against Turkey

Turkish President Recep Tayyip Erdogan, embroiled in a bitter dispute with the USA, a North Atlantic Treaty Organisation ally, contended Sunday the plunging value of his country's lira currency amounted to a "political plot" against Turkey. The two North Atlantic Treaty Organisation allies have been at odds over a wide range of issues: diverging interests in Syria, Ankara's ambition to buy Russian defense systems, and more recently, the case of Andrew Brunson, an evangelical pastor on trial in Turkey.

The embattled Turkish lira tumbled more than 16% to new record lows against the dollar as strains with the U.S. intensified over Brunson, as well as Washington's co-operation with the Syrian Kurdish militia force in the fight against Islamic State and other forces in Syria.

All eyes will be on the lira when foreign exchange markets reopen on Monday after the weekend pause.

The behavior of the United States is unacceptable, irrational and is detrimental to our lasting friendship.

President Recep Tayyip Erdogan vowed Saturday to defy United States "threats" over a detained pastor, showing no signs of concessions in a bitter row that has caused the Turkish lira to crash.

Turkey and the USA have disagreed on a number of issues since Trump came into office, including Washington's support of Kurdish groups in neighbouring Syria and its refusal to extradite Fethullah Gülen, the cleric Erdogan claims is behind the botched attempt to unseat him.

The lira's plunge is one of the most serious economic crises that Erdogan has faced since coming to power in 2003 in the wake of a financial crisis in 2001 that brought the economy to near meltdown.

"We are never accepting this order which declared economic war to the entire world and which held countries to ransom through sanction threats", he added, referring to the USA administration. "Some close the doors and some others open new ones".

Washington "must give up the misguided notion that our relationship can be asymmetrical", he said in the opinion piece.

"We can only say "good-bye" to anyone who sacrifices its strategic partnership and a half century alliance with a country of 81 million for the sake of relations with terror groups", Erdogan said.

Trump has described the pastor's detention as a "total disgrace" and urged Erdogan to free him "immediately".

The sanction and tariff threats have led to a near-collapse of the Turkish lira - which tumbled 19 percent on August 10 alone - and forced Ankara into cost-cutting steps to stabilize the economy. Erdogan asked Washington. "What happened to you now?"

In a separate opinion piece in the pro-government newspaper Daily Sabah, Erdogan's spokesman Ibrahim Kalin said Turkey's efforts to solve the crisis with diplomatic methods had been dismissed by the Trump administration, warning that "the USA runs the risk of losing Turkey" as an ally.

Erdogan, who has called himself the "enemy of interest rates", wants cheap credit from banks to fuel growth.

The United States sanctioned Turkey for imprisoning an American priest on bogus charges. Erdogan's remarks also knocked back investors' expectations of a rate increase from the central bank.

  • Anthony Vega