Qatar’s support for the Turkish Lira is giving Ankara some breathing space; the natural gas powerhouse pledged $15bn in support of the Turkish currency.
Turkey offered its support to Qatar when a Saudi-led embargo isolated Doha in the spring of 2017. The Lira has recovered 5% on Wednesday, having lost a cumulative 20% since last Friday. The Lira has lost 30% of its value since January.
In the medium to long run, Turkey is still faced with galloping double-digit inflation, a deficit that exceeds $50bn and the imminent challenge of refinancing its sovereign debt amid surging bond yields.
Meanwhile, hopes that the economic standoff between Ankara and Washington will subside are dim. Turkey is seemingly uncompromising over US demands for the release of Evangelical pastor Andrew Brunson, whom Ankara detained in 2016 and was charged with terrorist connections to PKK and Fethullah Gulen.
The pastor is now under house arrest.
On Wednesday, Turkey signed a decree raising tariffs on US goods. US cars have been hit with a 120% tariff, alcoholic drinks by 140% and leaf tobacco by 60%. Tariffs will also affect US cosmetics, rice and coal. Meanwhile, the government is calling for a boycott.
According to the opposition paper Cumhuriyet, Turkish authorities are taking measures against the reporting of the economic crisis. Capital Market authorities are warning they are willing to prosecute the press on charges of “market fraud” for reports deemed not to be factual and spreading “rumours.” Such charges come with a 2-to-5 years prison time.