Lira rallies after Turkey raises tariffs on US imports

[ceterissss]

Turkey's move to increase tariffs on US imports has helped boost its weakened currency.

A decree signed by President Recep Tayyip Erdogan raised the tariffs on cars to 120%, on alcoholic drinks to 140% and on leaf tobacco to 60%.

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


The lira rose 3%, also helped by measures aimed at deterring foreign investors speculating on the lira.

Despite the rise, Turkey's currency has lost almost a third of its value against the dollar since January, pushing up the price of everyday items and raising fears that its weakness could infect other emerging market currencies.

Explaining the new tariffs, Turkish Vice-President Fuat Oktay said the rises were ordered "within the framework of reciprocity in retaliation for the conscious attacks on our economy by the US administration".

Tariffs were also increased on cosmetics, rice and coal. Turkey had previously said it would boycott US electronic products.

Turkish Trade Minister Ruhsar Pekcan told the state run Anadolu news agency that the doubling of tariffs on some imported US products would amount to $533m.

Inflation
The lira had plunged to record lows on Monday, but has since clawed back some of its losses, not only after the retaliation on tariffs, but also after the Turkish Central Bank announced banks would be given help to keep money moving around the system.

Measures to restrict the amount of currency that can be exchanged with foreign banks were also said to be boosting the currency.

President Erdogan said earlier this week that Turkey should not "give in to the enemy" by investing in foreign currencies.

He has presided over soaring inflation and borrowing levels, but insists the lira's plight is the result of a "campaign" led by foreign powers.

Is Turkey heading for an economic crisis?
Turkey's lira slump explained
Jailed pastor
Mr Erdogan has accused the US of trying to "bring Turkey to its knees through threats over a pastor".

But the US insists Andrew Brunson, a long-time Turkish resident who ran the tiny Izmir Resurrection Church, is "a victim of unfair and unjust detention".

An evangelical from North Carolina, he has been held in Turkey for nearly two years over alleged links to the outlawed Kurdistan Workers Party and the Gulenist movement, which Turkey blames for a failed coup in 2016.

On Wednesday, a Turkish court rejected his latest appeal to be released from house arrest. A higher court is still to rule, his lawyer told Reuters.

White House press secretary Sarah Sanders said the US had seen "no evidence that Pastor Brunson has done anything wrong".

Mr Brunson has denied charges of espionage, but faces up to 35 years in jail if found guilty.



SOURCE:   https://www.bbc.com/news/business-45194003

[lepbagong]

Turkey's move to increase tariffs on US imports has helped boost its weakened currency.

A decree signed by President Recep Tayyip Erdogan raised the tariffs on cars to 120%, on alcoholic drinks to 140% and on leaf tobacco to 60%.

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


The lira rose 3%, also helped by measures aimed at deterring foreign investors speculating on the lira.

Despite the rise, Turkey's currency has lost almost a third of its value against the dollar since January, pushing up the price of everyday items and raising fears that its weakness could infect other emerging market currencies.

Explaining the new tariffs, Turkish Vice-President Fuat Oktay said the rises were ordered "within the framework of reciprocity in retaliation for the conscious attacks on our economy by the US administration".

Tariffs were also increased on cosmetics, rice and coal. Turkey had previously said it would boycott US electronic products.

Turkish Trade Minister Ruhsar Pekcan told the state run Anadolu news agency that the doubling of tariffs on some imported US products would amount to $533m.

Inflation
The lira had plunged to record lows on Monday, but has since clawed back some of its losses, not only after the retaliation on tariffs, but also after the Turkish Central Bank announced banks would be given help to keep money moving around the system.

Measures to restrict the amount of currency that can be exchanged with foreign banks were also said to be boosting the currency.

President Erdogan said earlier this week that Turkey should not "give in to the enemy" by investing in foreign currencies.

He has presided over soaring inflation and borrowing levels, but insists the lira's plight is the result of a "campaign" led by foreign powers.

Is Turkey heading for an economic crisis?
Turkey's lira slump explained
Jailed pastor
Mr Erdogan has accused the US of trying to "bring Turkey to its knees through threats over a pastor".

But the US insists Andrew Brunson, a long-time Turkish resident who ran the tiny Izmir Resurrection Church, is "a victim of unfair and unjust detention".

An evangelical from North Carolina, he has been held in Turkey for nearly two years over alleged links to the outlawed Kurdistan Workers Party and the Gulenist movement, which Turkey blames for a failed coup in 2016.

On Wednesday, a Turkish court rejected his latest appeal to be released from house arrest. A higher court is still to rule, his lawyer told Reuters.

White House press secretary Sarah Sanders said the US had seen "no evidence that Pastor Brunson has done anything wrong".

Mr Brunson has denied charges of espionage, but faces up to 35 years in jail if found guilty.



SOURCE:   https://www.bbc.com/news/business-45194003

Turkey is currently very dependent on large countries, we know that the Turkish president has made an unusual change recently by announcing that the Turkish Central Bank is using the Chinese yuan for the first time in the history of the Turkish economy. The use of yuan and lira in Turkish-Chinese relations is based on a swap agreement that has begun to be realized.
This is a significant step that will further strengthen financial cooperation between Turkey and China.

Swap is a two-currency exchange transaction through a cash purchase with a futures resale, or a cash sale with a future repurchase. The aim is to obtain exchange rate certainty (the exchange rate is fixed throughout the contract), so as to avoid foreign exchange losses.
Turkey wants to reduce the use of US dollars in global trade transactions. Dependence on the US dollar has caused instability in the lira exchange rate, which has drastically decreased several times. (https://www.wartaekonomi.co.id)

This indicates that Turkey has begun to change the way to solve the existing problems so far, because the need for a country that now controls almost a lot of trade is very acceptable to Turkey.
There is nothing wrong with President Turkey's actions as long as the actions taken certainly can make the country not collapse and can navigate the global economic problems and can be a country that can continue to contribute to its economy.