With the dispute with Washington pushing the Turkish lira to its lowest ever, President Tayyip Erdogan announced that the Middle-Eastern country would boycott electronic goods from the United States in retaliation.
The Turkish currency had shed over 40% of its value this year, and Erdogan’s push for lower interest rates further led to the lira crashing to an all-time low of 7.24 to US dollar early on Monday.
The slide affected global markets as US and European stocks reacted to it, with investors worrying about banking links to Turkey.
The currency did recover on Tuesday though, trading in the 6.5 range in the morning. Reports suggest that a planned call by the finance minister to console investors is the reason for this revival.
The Turkish president had earlier appealed to the people to sell dollars and euros to help aid the national currency. In a speech to his party members, Erdogan said, “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.”
Pushing for the boycott on US products, he added, “If they have iPhones, there is Samsung on the other side, and we have our own Vestel here.” Turkish electronics company Vestel’s shares inched 5% higher following this.
Last week, the US raised export tariffs on Turkish metals. Washington also imposed sanctions on two Turkish ministers in relation to a terrorism-related trial of a US pastor Andrew Brunson in the country, further straining diplomatic ties.
The euro made a recovery on Tuesday after incurring losses due to the fall of the lira, but it was not enough to lift European investors – with fears mounting that banks exposing themselves to Turkey could still impact the unified currency.