Published: Tue, August 14, 2018
Money | By Bruce West

United States stocks open higher as Turkish lira rebounds

United States stocks open higher as Turkish lira rebounds

Turkey's President Tayyip Erdogan addresses Turkish Ambassadors during a meeting in Ankara, Turkey, Aug 13, 2018.

ANALYST'S TAKE: "Turkey's financial crisis has taken center stage, displacing trade wars as the immediate concern", said Eugene Leow of DBS Group in a report. The central bank has, however, always been at odds with President Erdogan, a self- described "enemy of interest rates", who persistently called for lower rates in Turkey to fuel credit growth and economic expansion. He did not say when the boycott would start or how it would be enforced. Brunson was arrested in 2016 on charges of participating in a failed military coup against Erdogan's government.

My take: When Trump threatens trading partners, Apple gets targeted. It also doubled tariffs of steel and aluminum imports.

Investors are anxious about a confluence of factors: the country's reliance on foreign loans that may stop flowing in as interest rates rise in other economies, like the U.S.; Erdogan's insistence that the central bank not raise interest rates, as most independent analysts say it should; and a spat with the U.S. that has led to sanctions and the fear of greater isolation from longtime allies in the West. "This is called carrying out an operation against Turkey".

USA embassy charge d'affaires Jeffrey Hovenier on Tuesday visited Brunson in the western city of Izmir.

Relations between North Atlantic Treaty Organisation allies Turkey and the United States are at a low point, hurt by a series of issues from diverging interests in Syria, Ankara's plan to buy Russian defence systems and the detention of an American pastor, Andrew Brunson.

"If they have the iPhone, there is Samsung elsewhere. In our country there is Venus, Vestel", he added, referring to Turkish smartphone brands.

It did not provide information on the accounts but said they aimed to "manipulate the dollar rate and form negative perceptions" concerning the Turkish economy.

The difference is that unlike Russian Federation, the USA and Turkey are North Atlantic Treaty Organisation members.

Asia share markets slipped and the euro hit one-year lows on Monday as a fresh fall in the Turkish lira fuelled demand for safe havens, including the us dollar, Swiss franc and yen. "I believe in my nation", Erdogan vowed, the New York Times reported.

Investors are now fretting over potential economic contagion with the Turkish lira.

Many economists suggest Turkey's problems stem primarily from mismanagement on the watch of the president, who for years championed a development boom fueled by low interest rates and the amassing of high foreign currency debt. On Tuesday, one dollar was worth 7.2 lira.

An employee at an upscale clothing store who declined to give his name said the amount of shoppers was unusual even in high season, attributing it to the lira's fall.

The State Department warned Turkey in June that its plan to purchase these planes could be hurt if it continued with its plan to also buy Russian S-400 missiles.

Like this: