US Warns Turkey of Sanctions if it Does Not Release Pastor

As NPR explained in a primer on the dispute, much of the ill will shared by Turkey and the US stems not only from the back-and-forth on tariffs, but also from a diplomatic dust-up centered on two men of faith. During that time, fears of contagion roiled global markets.

In another high-profile case, a Turkish court ruled on August 15 to release from jail Taner Kilic, the local chair of Amnesty International, a researcher from the rights group said.

Turkey’s central bank meets next on September 13.

Bilateral ties have spiraled into a full-blown crisis over the trial of Andrew Brunson, a Christian pastor, who is accused of having links with perpetrators of a failed military coup against Erdogan in 2016.

Leaving aside the wisdom of launching a trade war with a North Atlantic Treaty Organisation ally over one man, the currency justification was – how to put it politely? – peculiar.

U.S. State Department representatives have said the claims against Brunson are not credible.

In a sign that Turkey may hope to make common cause with other affected countries, Erdogan and French President Emmanuel Macron spoke by phone on Thursday, discussing developing economic and trade ties and boosting bilateral investment, a Turkish presidential source said. “He needed help getting somebody out of someplace; they came out”.

On Monday, the central bank said it would provide all the liquidity Turkish banks needed, as it seeks to keep money flowing in the financial system.

Tensions between Turkey and the USA have been on the rise as Trump has pressed for the release of the pastor. More recently, however, he has lightened up on equity exposure.

Among the big concerns is that Turkey’s has amassed high levels of foreign debt to fuel growth in recent years.

USA gold futures were down 1.1 per cent at $1,172.7 an ounce.

The president has remained defiant, calling on Turks to sell their gold and dollars for lira, describing the crisis as an “economic war”.

This has worsened a crisis for Turkey’s currency, the lira, which has lost about a third of its value against the dollar since January.

“Rates have gone up by 10 percent”. But his father-in-law’s opposition to higher interest rates may complicate that quest. Erdogan has tightened his grip since consolidating power after general elections this year.

Turkey’s finance chief tried to reassure thousands of worldwide investors on a conference call Thursday, in which he pledged to fix the economic troubles that have seen the country spiral into a currency crisis. In the three days following Albayrak’s appointment in early July, the lira fell more than three per cent.

Erdogan has moved to shore up alliances in Europe and the Middle East, easing pressure on the battered lira, as the standoff with the US has deepened.

Turkey and Qatar have become close economic and political partners.

It might be head-banging time again all too soon.