ISTANBUL: Turkey has vowed to take measures later Monday to calm market fears sparked by the precipitous plunge in the lira's value as its president accused Washington of spearheading an "underhand plot" against his country.
The dispute between the two NATO allies -- which reached new intensity over the detention of an American pastor in Turkey -- has hammered the lira and also raised questions over the future partnership between Washington and Ankara.
It caused global market jitters last week as investors fretted over potential economic contagion from Turkey, particularly to European banks. The already embattled Turkish lira tumbled some 16 percent against the dollar on Friday as US President Donald Trump said he had doubled steel and aluminium tariffs on Turkey.
Erdogan vows to defy US 'threats' after currency crash
Overnight it fell to a new record low of 7.2362 to the dollar before recovering to around 6.8222 in early Asian trading, similar to its trading price on Friday. In a call with reporters late Sunday Turkey's finance minister Berat Albayrak said Ankara was planning to roll out an "action plan" on Monday in response to the crisis. "Our institutions will take necessary action from Monday in order to relieve the markets," he said, adding that the plan would centre on "the state of our banks and the small and medium size enterprises" most affected by the lira's plunge.
Albayrak's comments came as his father-in-law, President Recep Tayyip Erdogan, said he was in no mood to offer concessions to the United States in one of the worst spats between the two NATO allies in years. "The aim of the operation is to make Turkey surrender in all areas, from finance to politics," Erdogan told ruling party members in the Black Sea city of Trabzon. "We are once again facing a political, underhand plot. With God's permission we will overcome this," he added.
Turkey will stand its ground faced with US sanctions: Erdogan
Erdogan appeared unworried by the punitive measures imposed by the US, saying Turkey could turn to other partners and again terming the crisis an "economic war". "We will give our answer, by shifting to new markets, new partnerships and new alliances, to the one who waged an economic war against the entire world and also included our country," Erdogan said.
"Some close the doors and some others open new ones," added Erdogan, who has built closer ties over the last few years with countries from Latin America, Africa and Asia. Erdogan appeared to indicate that the entire alliance between Turkey -- which joined NATO in 1952 with strong American backing -- and the US was at stake. "We can only say 'good-bye' to anyone who sacrifices its strategic partnership and a half century alliance with a country of 81 million for the sake of relations with terror groups," he said. "You dare to sacrifice 81-million (in) Turkey for a priest who is linked to terror groups?"
Turkey rules to keep US pastor in jail
American pastor Andrew Brunson has been held since October 2016 on charges of terror and espionage, and if convicted, could face a jail term of 35 years. Trump has described his detention as a "total disgrace" and urged Erdogan to free him immediately. A delegation led by Turkish Deputy Foreign Minister Sedat Onal failed to secure a deal last Wednesday in talks in Washington on a number of issues including Brunson. Washington earlier this month already imposed sanctions on senior Turkish officials over the Brunson case, angering Erdogan and prompting retaliatory measures by Ankara. In Trabzon, Erdogan confirmed media reports that Washington gave Onal's delegation a deadline for the release of Brunson.
"They tell us to release the priest by Wednesday 6:00 pm, otherwise the sanctions will begin," said Erdogan, adding Turkey was not a country to agree to such requests. Analysts say that while Washington's sanctions against Ankara sparked the immediate crisis, Turkey's economy has been risking trouble for a while due to high inflation and the weak lira. The central bank has over the last few weeks defied calls from markets for rate hikes to combat these problems, raising fears of interference from Erdogan who has repeatedly called for low interest rates.
Erdogan had on Saturday described interest rates as a "tool of exploitation", in remarks that may not be warmly welcomed by the markets. The Brunson case is just one of many bones of contention between Turkey and the United States, ranging from Syria to Ankara's increasingly cosy relationship with Moscow. Erdogan also hit back at US authorities for convicting Mehmet Hakan Atilla, 47, deputy director general of Turkish lender Halkbank on charges of helping Iran evade US sanctions on billions of dollars of oil proceeds.