Will lifting United States sanctions resolve Turkey's economic crises?

Will lifting United States sanctions resolve Turkey's economic crises?

The Turkish lira has been falling in value for months, but last week it plummeted 20 percent because of a dispute with Washington over Andrew Brunson, the evangelical pastor from North Carolina.

The Qatari money will be channeled into banks and financial markets, a Turkish government source told Reuters.

The country's currency, the lira, has fallen sharply against the USA dollar in recent weeks but rebounded after the aid announcement.

The dispute with the United States, focused on a tit-for-tat tariff row and Turkey's detention of Brunson, helped turn the currency's steady decline into meltdown.

Although Qatar has now pledged $15 billion it has not actually paid anything, and it may not be enough to solve Turkey's economic problems.

Turkey retaliated with some $533 million of tariffs on some US imports - including cars, tobacco and alcoholic drinks - and said it would boycott USA electronic goods, singling out Iphones.

Turkey has responded defiantly to the US's threats by implementing retaliatory tariffs on a raft of U.S. imports, including passenger cars, tobacco and alcohol.

The pastor row is one of several between the North Atlantic Treaty Organisation allies, including diverging interests in Syria and USA objections to Ankara's ambition to buy Russian defense systems, that have contributed to instability in Turkish financial markets.

Treasury Secretary Steven Mnuchin also declared on Thursday that the U.S. is prepared to implement additional sanctions if Mr Brunson is not released. It could merely be a way for the foreign president to gather support for his regime among Turkish nationalists.

That followed a string of urgent steps Erdogan has taken to protect Turkey's economy, which was already under strain before the latest USA tariffs and sanctions were announced.

Turkey is ready to discuss its issues with the United States as long as there are no threats, Turkey's Foreign Minister Mevlut Cavusoglu said.

Following the Qatar news, the lira firmed briefly to 5.8699 from 6.04 to the dollar, before easing back to 6.0500 by 1658 GMT.

And the day earlier, two Greek soldiers held by Turkey since March for illegally crossing the border were also freed.

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Analysts say Turkey is also likely to seek a more dynamic economic relationship with China and Russian Federation, with whom ties have warmed considerably in recent years.

Erdogan also moved to strengthen ties with Germany, Turkey's biggest economic partner by far, accounting for about 37 billion euros ($42 billion) in bilateral trade previous year.

Al-Shehri said Ankara appeared to have blackmailed Qatar into supporting it.

"Rates have gone up by 10 per cent". Central bank data showed foreign currency deposits held by local investors rose to $159.9 billion in the week to August 10, from $158.6 billion a week earlier. "They are killing offshore lira liquidity to stop foreigners shorting the lira".

"No one has an interest in the economic destabilization of Turkey", Merkel said in Berlin this week.

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 United States, vowing that his country will only emerge "stronger" from the current market volatility.

The chief executive of Turkey's Akbank said the banking sector remained strong and the measures taken to support the market had started to have an impact, adding there was no withdrawal of deposits.

The decree said the move brought tariffs to 50 percent on imports of USA rice, 140 percent on hard alcoholic drinks like spirits, 60 percent on leaf tobacco and 60 percent on cosmetics.

Turkey took the action in response to what it called the Trump's administration's attack on its economy.

The lira has clawed back some ground over the last two days - after losing nearly a quarter of its value on Friday and Monday - but economists are warning that Turkey must urgently address its economic imbalances to avoid more troubles ahead.

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.

Trump has repeatedly asked for Brunson's release, while Ankara said the decision was up to the court.