Qatar's emir heads to Turkey for talks with Erdogan

Qatar's emir heads to Turkey for talks with Erdogan

Turkey's weakened currency, the lira, plunged by more than 20% in response to those United States sanctions.

The US doubled tariffs last week over Turkey's refusal to extradite a US pastor who is imprisoned there.

The United States on Wednesday ruled out removing steel tariffs that have contributed to a currency crisis in Turkey even if Ankara frees a USA pastor, as Qatar pledged $15 billion in investment to Turkey, supporting a rise in the Turkish lira. What this does is prevent investors, like hedge funds, from accessing lira liquidity in the offshore swap market.

Erdoğan and Trump are locked in a dispute about the U.S. pastor Andrew Brunson, who was arrested nearly two years ago and accused of plotting against the Turkish government.

"Remarkable turnaround", Tim Ash, Bluebay Asset Management senior emerging markets analyst wrote in a client note.

Andrew Brunson has been at the heart of the ongoing fight after the US sanctioned two top Turkish officials for his continued detention, and Turkey's vow to retaliate, even as its currency plummets.

There was a clear, sharp drop in the lira's value on Friday after Trump tweeted he was doubling tariffs on Turkish steel and aluminum, citing a national security threat, and a smaller decline when the USA sanctioned Turkey's Interior and Justice Ministers on August 1.

Moves by the central bank to ensure Turkish banks have liquidity and a planned conference call by Turkish Finance Minister Berat Albayrak, who is Erdogan's son-in-law, on Thursday have gone some way to reassuring investors.

In return, Erdogan signed a decree to also raise tariffs on some US imports including cars, alcohol and tobacco, an official report said Wednesday.

Tariffs have been doubled on goods including cars, tobacco, and alcohol, while coal, rice, and cosmetic products have also been hit by increases.

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It also said that until markets "normalize", it would temporarily stop applying the effect of day-to-day losses on the securities held by banks to their capital adequacy ratios.

Meanwhile, both local and foreign brands operating in Turkey are preparing to increase the price of their products in a move to adjust to the exchange rate.

"The tariffs from Turkey are certainly regrettable and a step in the wrong direction", White House press secretary Sarah Sanders said while stopping short of announcing fresh retaliatory measures.

Turkey and Qatar have traditionally maintained good ties and Ankara stood by Doha after Saudi Arabia and other Arab states severed diplomatic, trade and travel ties with Qatar past year, accusing it of financing terrorism - a charge Doha denies.

Brunson's charges include spying for the PKK listed as a terrorist group by both the USA and Turkey and the Fetullah Terrorist Organization (FETO).

In a tweet on July 26, Trump called Brunson a "great Christian, family man and wonderful human being" and said he "should be released immediately".

Turkish government officials are concerned, but the country's tourists have taken advantage of the plunging currency to snap up luxury goods at stores like Chanel and Louis Vuitton.

The evangelical pastor is accused of terrorism charges and aiding the network of a US -based Islamic preacher blamed by Ankara for masterminding a coup attempt in July 2016 against Turkish President Tayyip Erdogan.

Erdogan, rejecting economic fundamentals as the cause of lira weakness, said Turkey was the target of an economic war.

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