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Turkey to shun US electronics

Turkish airline, telecoms firm to halt US advertising

August 14, 2018

Veiled women hold shopping bags, as they walk in Istanbul. — AFP
Veiled women hold shopping bags, as they walk in Istanbul. — AFP

ISTANBUL — President Tayyip Erdogan said on Tuesday Turkey will boycott electronic products from the United States, retaliating in a dispute with Washington that has helped drive the lira to record lows.

Turkey’s national airline and its main telecoms firm will halt advertising in US media in response to the crisis in relations between the two allies, company officials said on Tuesday.

Flag carrier Turkish Airlines and Turk Telekom made their announcements after a campaign on Twitter calling for an end to advertising in US media outlets.

An official at one of the companies said the advertising boycott would encompass all written, visual and social media, although existing advertising campaign agreements would not be affected.

“We as Turkish Airlines are taking our place alongside our state and people,” senior vice president for media relations Yahya Ustun wrote on Twitter with the hashtag #ABDyeReklamVerme, meaning “don’t give advertisements to the USA”.

The lira has lost more than 40 percent this year and crashed to an all-time low of 7.24 to the dollar early on Monday, hit by worries over Erdogan’s calls for lower interest rates and worsening ties with the United States.

The weakness of the Turkish currency has rippled through global markets. Its drop of as much as 18 percent on Friday hit US and European stocks as investors fretted about banks’ exposure to Turkey.

On Tuesday the lira recovered some ground, trading at 6.53 to the dollar at 0918 GMT, up around five percent on the day.

Erdogan says Turkey is the target of an economic war, and has made repeated calls for Turks to sell their dollars and euros to shore up the national currency.

“Together with our people, we will stand decisively against the dollar, forex prices, inflation and interest rates. We will protect our economic independence by being tight-knit together,” he told members of his AK Party in a speech.

“We will impose a boycott on US electronic products. If they have iPhones, there is Samsung on the other side, and we have our own Vestel here,” he said, referring to the Turkish electronics company, whose shares rose five percent.

Erdogan said his government would offer further incentives to companies planning to invest in Turkey and said firms should not be put off by economic uncertainty. “If we postpone our investments, if we convert our currency to foreign exchange because there’s danger, then we will have given into the enemy,” he said.

“What you want to see is tight monetary policy, a tight fiscal policy and a recognition that there might be some short-term economic pain — but without it there’s just no credibility of promises to restabilize things,” said Craig Botham, Emerging Markets Economist at Schroders.

Dollar-denominated bonds issued by selected Turkish banks continued to fall on Tuesday, although sovereign bonds steadied.

Relations between NATO allies Turkey and the United States are at a low point, hurt by a series of issues from diverging interests in Syria, Ankara’s plan to buy Russian defense systems and the detention of an American pastor, Andrew Brunson.

The White House on Monday said US national security adviser John Bolton met Turkey’s ambassador to the United States to discuss the detention of Brunson. The pastor’s Turkish lawyer launched a fresh appeal on Tuesday for his release.

Turkey’s business lobbies called on Tuesday for a tighter monetary policy to stabilize the lira, and for diplomacy to solve US-Turkish disputes.

Following Monday’s meeting between Bolton and Turkish ambassador Serdar Kilic, US officials have given no indication that the United States has been prepared to give ground in the standoff between the two countries’ leaders.

Ankara has repeatedly said the Brunson case was up to the courts and a Turkish judge moved Brunson from jail to house arrest in July. Infuriated by the move, which Washington said was insufficient, Trump sanctioned two Turkish ministers and doubled tariffs on metal imports, adding to lira’s slide. — Agencies


August 14, 2018
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