Qatar to make direct investment of $15B in Turkey

Ivan Schwartz
August 16, 2018

On Wednesday night, a group of Istanbul taxi drivers hung Turkish flags on their cars and sounded their horns as they drove in convoy to the USA consulate, laying a black wreath there in protest, the Demiroren news agency said.

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 previous year, accusing it of financing terrorism, a charge Doha denies.

Emerging-market economies broadly are also in much better shape than 20 years ago, with stronger currency reserves, say strategists at Wells Fargo Investment Institute.

Turkish officials say Qatar has pledged $15 billion of direct investments for Turkey as it struggles with a currency crisis.

The lira had nosedived in recent weeks, hitting a record low of 7.24 last week, amid a diplomatic and trade dispute with the United States.

Turkey's Finance Minister Berat Albayrak promised on Thursday the country will emerge "stronger" from the currency crisis sparked by a diplomatic spat with the United States, and ruled out an International Monetary Fund bailout.

US National Security Advisor John Bolton met with the Turkish ambassador to the US on Monday, the latest in a series of meetings between high level administration officials and Turkish officials as they try to resolve the impasse over Brunson.

A decree signed by President Tayyip Erdogan doubled Turkish tariffs on passenger cars to 120 per cent, on alcoholic drinks to 140 per cent and on leaf tobacco to 60 per cent. Tariffs were also doubled on goods such as cosmetics, rice and coal.

"The sanctions that have been placed on Turkey are specific to Pastor Brunson and others that we feel are being held unfairly", she added.

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The administration of US President Donald Trump has regretted Turkey's move to increase tariffs on US imports, which itself came in retaliation for increased tariffs earlier imposed by Washington on Ankara.

Erdogan issued the call and announced a massive hike in tariffs on US goods this week after the USA raised tariffs on Turkish imports and aimed new sanctions at Turkish officials in the row over American Pastor Andrew Brunson, who remains under house arrest pending his trial in Turkey on charges of espionage and terrorism. Erdogan's government has blamed followers of the cleric Gulen for an unsuccessful 2016 coup, leading to a purge of thousands of people from Turkey's civil service, police, military and media and educational institutions, with many of them jailed.

Turkey's foreign minister has said that it is prepared to negotiate with the U.S. as equals, but will not be dictated to.

A previous appeal by Halavurt on behalf of Brunson was rejected by the court. Cavusoglu said ties with the bloc, long strained, were on a firmer basis and had started normalising.

In an effort to defend the lira, Turkey's central bank tightened its rules on currency swaps and other foreign exchange transactions, limiting banks' ability to supply lira to foreign financial companies. "These are appeals that require fast decision making because they are related to an individual's freedoms", he said. The recovery also spilled into the bond market, with yields on 10-year local debt falling 28 basis points to 21.1 percent.

The leaders engaged in three hours of talks on Wednesday, according to Erdogan's press office, discussing bilateral relations and regional developments.

Since January, the Turkish lira has lost more than 34% of its value against the dollar, pushing up the price of everyday items.

The lira had already rebounded about 8 per cent yesterday on news of a planned conference call tomorrow in which the finance minister will seek to reassure global investors.

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