Qatar to invest $15bn in Turkey amid lira currency crisis

People outside a currency exchange in Istanbul

The move comes after US President Donald Trump announced last week that the United States was doubling steel and aluminium tariffs on Turkey, as the two North Atlantic Treaty Organisation allies quarrel over Brunson's detention.

Turkey doubled tariffs on some USA imports including alcohol, cars and tobacco on Wednesday in retaliation for US moves, but the lira rallied further after the central bank's liquidity moves had the effect of supporting the currency.

Tensions between the USA and Turkey have been steadily rising since American pastor Andrew Brunson was detained by Turkish officials on charges of terrorism and espionage.

His detention has soured relations with Washington, with US President Donald Trump doubling aluminum and steel tariffs for Turkey in punitive actions against Ankara's refusal to release Brunson.

A decree signed by President Recep Tayyip Erdogan raised the tariffs on cars to 120%, on alcoholic drinks to 140% and on leaf tobacco to 60%.

According to Bloomberg calculations, Turkey's new tariffs affect goods that accounted for US$1 billion of imports past year, similar to the value of the metals subjected to higher USA taxes.

Turkey's Vice President Fuat Oktay commented on the move, stating: "Under the principle of reciprocity, the tax rates for imports of certain products have been increased against the U.S. administration's conscious attacks on our economy".

The row with Washington has helped to drive the lira to record lows, with the currency losing more than 40 per cent of its value against the dollar this year, prompting central bank liquidity moves to support it.

President Recep Tayyip Erdogan has found a benefactor to help pull Turkey from the brink of a financial crisis as Qatar promised to invest US$15 billion in the country.

In recent days, Qatari supporters of Turkey have begun a public campaign in Doha to change their riyals into lira in an attempt to shore up the plunging Turkish currency.

White House press secretary Sarah Sanders said the United States had seen "no evidence that Pastor Brunson has done anything wrong".

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In an effort to defend the lira, Turkey's central bank tightened its rules on currency swaps and other foreign exchange transactions, limiting banks' ability to supply lira to foreign financial companies.

Investors are anxious that about Erdogan's control over the central bank and his pressure to keep it from raising interest rates.

Sanders said Brunson's release would not lead to an easing in the tariffs, but that it could lead to an easing in sanctions.

"Pastor Andrew Brunson is an innocent man held in Turkey & justice demands that he be released". The steps spurred a 3 per cent gain in the lira to 6.1648 per dollar by 1:56 Istanbul, after an 8.4 per cent advance on Tuesday.

Also helping was Turkey's decision to release two Greek soldiers from prison on Tuesday, increasing prospects for improved relations with the European Union.

"Apple's iPhone products were the Turkish people's favorite ones".

Despite the continuing stalemate and threat of further U.S. sanctions, the value of the Turkish Lira increased slightly on Tuesday, rising 8 percent from Monday's record low, to 6.3 Lira to the dollar.

Erdogan has warned Turkey could seek alternative partners pointing to Ankara´s strong ties with Russia, Iran and China.

Earlier this month The United States imposed sanctions on two top officials in Mr Erdogan's Cabinet in a new attempt to get North Atlantic Treaty Organisation ally Turkey to turn over Branson, who is accused of backing a coup attempt against Erdogan two years ago.

On Monday, the U.S. president signed a defense authorization act that notably prohibits the delivery of F-35 Joint Strike Fighter aircraft to Turkey if it buys Russia's S-400 air defense system.

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