Defiant Erdogan casts Turkey currency
crisis in religious, patriotic terms
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[August 20, 2018]
By Daren Butler
ISTANBUL (Reuters) - President Tayyip
Erdogan said on Monday an attack on Turkey's economy was no different
from a strike against its flag or the Islamic call to prayer, responding
to a recent currency sell-off in stark religious and nationalist terms
ahead of a major Muslim holiday.
In a pre-recorded address to mark the four-day Eid al-Adha festival,
which starts on Tuesday, a defiant Erdogan said the aim of the currency
crisis was to bring "Turkey and its people to their knees".
The lira <TRYTOM=D3> has tumbled some 40 percent this year, hit by
worries about Erdogan's influence over monetary policy and a worsening
diplomatic rift with the United States. The sell-off has spread to other
emerging market currencies and global stocks in recent weeks.
Amid the tension, several gunshots were fired on Monday from a vehicle
at the U.S. Embassy in the Turkish capital. Nobody was hurt.
"The attack on our economy has absolutely no difference from attacks on
our call to prayer and our flag. The goal is the same. The goal is to
bring Turkey and the Turkish people to their knees - to take it
prisoner," Erdogan said in the televised address.
"Those who think they can make Turkey give in with the exchange rate
will soon see that they are mistaken."
Erdogan stopped short of directly naming any countries or institutions,
but he has, in the past, blamed a shadowy "interest rate lobby", Western
ratings agencies and financiers.
Much of the recent tension has centered around a U.S. evangelical
Christian pastor, Andrew Brunson, who has been detained in Turkey on
terrorism charges, which he denies.
Brunson, originally from North Carolina, has lived in Turkey for two
decades and has become an unwitting flashpoint for the diplomatic rift.
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Turkish President Tayyip Erdogan attends a news conference in
Ankara, Turkey, August 14, 2018. REUTERS/Umit Bektas
On Friday, a Turkish court rejected Brunson's appeal for release,
drawing a stiff rebuke from President Donald Trump, who said the
United States would not take the detention of the pastor "sitting
The lira weakened to 6.1100 to the dollar at 0843 GMT, from a close
of 6.0100 on Friday.
On Friday two ratings agencies, Moody's and Standard & Poor's,
further cut Turkey's sovereign rating into junk territory.
The downgrades served to validate prevailing concerns that Turkey
"is unlikely to avoid a significant slowdown in economic activity"
and that the lira's fall "poses a risk to financial stability" said
Piotr Matys, an emerging markets strategist at Rabobank.
In addition to the lira, Turkey's sovereign dollar bonds fell and
the cost of insuring its debt rose.
The currency crisis poses an additional risk to Germany's economy,
the German finance minister said on Monday.
(Reporting by Daren Butler; Editing by David Dolan and Gareth Jones)
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