Turkey’s finance minister has reassured thousands of foreign investors that Ankara will manage to contain the currency crisis triggered by a dispute with the US, vowing that his country will only emerge “stronger” from the current market volatility.
In a conference call with some 6,000 foreign investors on Thursday, Berat Albayrak said Turkey will navigate this period of US sanctions with the help of other parties such as Russia, China and Germany.
He said many world states are currently dealing with the issue of US sanctions, calling for a concerted global reaction to Washington’s economic pressure tools.
“Turkey will emerge stronger from these (currency) fluctuations,” Albayrak told the conference.
An originally political battle between Ankara and Washington over an American pastor jailed in Turkey has turned into a full-scale economic and diplomatic confrontation between the two NATO allies.
North Carolina Pastor Andrew Brunson was imprisoned in Turkey in 2016 on charges of having links to those behind an abortive coup against the Ankara government. Washington, however, says there is no credible evidence against Brunson.
The tensions took a turn for worse after US President Donald Trump used his executive powers last week to authorize a doubling of steel and aluminum tariffs on Turkey, prompting a set of retaliatory measures from Ankara — including a similar hike in tariffs on imports from the US.
The economic spat sent Turkey’s national currency into free fall. The lira hit a record low against the dollar on Tuesday. It, however, recovered a bit a day after Turkish President Recep Tayyip Erdogan announced the sharp spike in tariffs on US goods.
Lira’s downward spiral has increased the already-high inflation in Turkey, which is nearing 16 percent.
Erdogan has remained defiant, promising to boycott iPhones and other foreign products. A Turkish court also rejected the American pastor’s appeal to be released from house arrest and have his travel ban lifted.
The finance minister further said Ankara has now a good understanding of all its domestic challenges, and that it is addressing the market anomaly.
“We are targeting lowering inflation into the single digits as soon as possible,” stated the minister, emphasizing that structural reforms would be a priority.
Albayrak further said the country’s banks have not been affected by the financial crisis and remain in a healthy and strong state, adding, however, that Turkey is prepared to stand by its public banks, if need be.
The minister added that his country has currently no plans to go to the International Monetary Fund (IMF) for help.
Allies come to Turkey’s aid
In the wake of the currency crisis, the Turkish president has held talks with French and German leaders, Emmanuel Macron and Angela Merkel, on ways to promote bilateral ties.
Earlier on Thursday, Erdogan and Macron emphasized during a phone conversation “the importance of fostering economic and trade relations as well as mutual investments.”
On Wednesday, the German chancellor also promised support for Turkey amid the spat with Washington.
Qatari Emir Sheikh Tamim bin Hamad Al Thani also visited Ankara on the same day, pledging $15 billion in direct investments in Turkey’s financial markets and banks, according to officials in Ankara.
Additionally, Russian Foreign Minister Sergei Lavrov on Tuesday visited Ankara, where he said Moscow has been exploring for some time using national currencies to settle bilateral trade deals with Turkey and other countries.
“I’m confident that the grave abuse of the role of the US dollar as a global reserve currency will result over time in the weakening and demise of its role,” the top Russian diplomat said.