Turkey's President Recep Tayyip Erdogan said Turkey would boycott us -made electronics such as Apple Inc.'s iPhone in response to USA sanctions, striking a defiant tone in a standoff that has pushed his country toward a financial crisis. Behind the scenes, however, diplomats resumed contact to ease tensions.
Turkish President Tayyip Erdogan greets supporters at the AKP headquarters in Ankara, Turkey on 25 June 2018.
Even more, Trump's direct reference to the Turkish lira sent the currency tumbling.
Along with a boycott of U.S. electronics, Erdogan indicated that his government would offer further incentives for companies to invest in Turkey.
His remarks came after the lira's plunge had turned into a rout toward the end of last week after US President Donald Trump announced the doubling of tariffs on Turkish steel and aluminum imports.
"We're going to continue to take steps to protect the lira", he said.
The lira has lost more than 40% this year and crashed to an all-time low of 7.24 to the dollar on Monday, hit by worries over Erdogan's calls for lower borrowing costs and by worsening ties with the United States, a major North Atlantic Treaty Organisation ally.
Rather, the only real hope for Turkey to stabilize its currency without resorting to exchange controls or to default on its debt would be for the country to restore investor confidence by seeking an IMF-backed economic stabilization program.
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Turkish President announces plan to boycott U.S. electronics, including iPhones
The pressure on Turkey is reflective of broader trends in emerging markets, although the lira is by far the worst performer. The euro fell to a one-year low against the dollar on Monday, and shares in Europe's major banks also dropped.
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.
The lira posted gains on forex markets for the first time after days of losses, giving the currency much-needed respite.
Traders said news that Finance Minister Berat Albayrak will hold a conference call with up to 1,000 investors to discuss the economy might also have helped support the currency.
A turbulent five days for the Turkish economy has seen the lira hit a record low against the United States dollar, sparking fears of a meltdown as Ankara and Washington traded blows over the detention of an American pastor in Turkey. It was not clear when the court would consider the appeal.
Brunson is accused of backing a coup attempt against Turkish Erdogan two years ago, charges that he has denied.
The financial regulatory body said violators could face two to five years in prison.
The United States' top diplomat in Turkey, Jeffrey Hovenier, visited Brunson on Tuesday and called for his case - and those of others detained in Turkey - to be resolved "without delay" and in a "fair and transparent manner". Share prices of major European and USA banks have fallen, given the risks that their outstanding loans to Turkey won't be repaid.
Asian stocks retreated on Wednesday, failing to follow Wall Street's gains, while the dollar was near a 13-month high as concerns about Turkey's financial crisis weighed on investor appetite despite the lira's move away from an all-time low.
Independent economists caution it would be hard to unseat the dollar as the top reserve currency as it is used widely in the global economy, for example to trade in oil and for commercial deals.