Turkish turmoil to send economic storm clouds over U.S. soon

Turkish President Recep Tayyip Erdogan gas called for a boycott of iPhones other USA electronic goods in a fiery speech.

"If they've got iPhone, there is Samsung on the other side".

It is not clear if this will be an official government boycott or just a call to the Turkish public to stop buying American electronics.

Emerging market stocks lost 2.11 percent. Erdogan said in response, "You might be the president".

Apple, iPhone, and iPad are trademarks of Apple Inc., registered in the USA and other countries.

He also made his now famous speech on the night of the July 2016 failed coup calling citizens out into the street through FaceTime, an iPhone app. The country's local currency, the lira, has since plummeted in value.

The latest decline was accelerated after U.S. President Donald Trump tweeted that he would double tariffs on Turkish steel and aluminum.

Erdoğan has accused the USA of stabbing Turkey in the back, the government has announced a crackdown on those on social media spreading fake news about the crisis and the central bank has eased financing requirements for Turkish banks.

A decade of easy money and low interest rates in the United States and European Union following the 2008 financial crisis led to investors searching for higher yields to emerging markets like Turkey.

The Turkish lira has nosedived in value in the past week over concerns about Erdogan's economic policies and after the US slapped sanctions on Turkey angered by the continued detention of an American pastor.

The Turkish leader had already said the US risks pushing a key North Atlantic Treaty Organisation member to seek allies elsewhere. "What do you want to do?" It was up about 5 percent on Tuesday, at about 6.52 per dollar, having fallen 42 percent so far this year, with most of those losses coming in recent weeks.

Turkey's central bank on Monday announced it was ready to take "all necessary measures" to ensure financial stability, promising to provide banks with liquidity as needed.

After three weeks of heavy pounding, the lira TRYTOM=D3 recovered some ground, trading at about 6.37 to the dollar, up nearly 8 percent from the previous day's close.

Turkey's Treasury and Finance Minister Berat Albayrak has said Ankara will continue taking steps within the rules of the free market.

In a joint statement issued on Tuesday, the industrialists' group TUSIAD and the Union of Chambers and Commodity Exchanges called on the government to allow the central bank to raise interest rates to help overcome the currency crisis.

The lira has dropped some 45 per cent this year.

The current crisis was sparked by Ankara's refusal to release pastor Andrew Brunson, who is now under house detention on terror-related charges and espionage.

Brunson's lawyer, Ismail Cem Halavurt, said the court had up to seven days to decide.

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

"Every part of [Vestel phones] are American", Rao said.

White House National Security Adviser John Bolton met with Turkey's ambassador to the US, Serdar Kilic, in Washington earlier this week to discuss the potential release of Brunson.

The Turkish envoy conveyed the message the pressure and threats would only lead to a "chaos" in relations which could only improve after Washington abandons the language of "threats", Cavusoglu said.

  • Eleanor Harrison