Tag Archives: Erdogan

Police called to Turk cleric’s U.S. compound after shooting report

FILE PHOTO: An aerial view of the Golden Generation Worship and Retreat Center in rural Saylorsburg, Pennsylvania, is seen in this picture taken July 9, 2013. REUTERS/Staff/File Photo

(Reuters) – Police were called to the Pennsylvania compound of Fethullah Gulen, the U.S.-based Muslim cleric accused by Turkey of instigating a failed 2016 coup, on Wednesday after a guard fired a shot at a suspected armed intruder, a Gulen spokesman said.

FILE PHOTO: U.S.-based Turkish cleric Fethullah Gulen at his home in Saylorsburg, Pennsylvania, U.S. July 10, 2017. REUTERS/Charles Mostoller/File Photo

FILE PHOTO: U.S.-based Turkish cleric Fethullah Gulen at his home in Saylorsburg, Pennsylvania, U.S. July 10, 2017. REUTERS/Charles Mostoller/File Photo

The security guard fired a warning shot as the person tried to enter the compound’s gates, and the intruder fled, the spokesman said. There are no known injuries or arrests, Alp Aslandogan, Gulen’s media adviser, told Reuters.

“Just one shot was fired,” Aslandogan said. “The person disappeared. The incident is over as far as we’re concerned.”

Gulen was inside his residence on the compound at the time.

“His response was that the authorities should be informed and everybody should cooperate fully with the investigation to find out what happened,” Aslandogan said.

Several Pennsylvania State Police cars were seen around the sprawling gated compound and retreat in Saylorsburg in the Pocono Mountains, according to photographs shared online by local news reporters.

Police, who left the scene a short time later, did not respond to requests for comment. A local television station, WNEP, reported that police were still searching for the suspected intruder.

President Tayyip Erdogan and the Turkish government accuse Gulen of orchestrating an attempted coup in July, 2016, in which rogue soldiers commandeered tanks and fighter jets, bombing parliament. More than 240 people were killed in the violence.

Gulen denies the accusations.

His compound is patrolled by a team of uniformed private security guards, some of them armed with handguns.

Erdogan has repeatedly demanded that the United States extradite Gulen to Turkey, straining relations between the two NATO allies. Washington has asked for more compelling evidence of Gulen’s involvement in the attempted coup.

A U.S. evangelical pastor, Andrew Brunson, has been held under house arrest in Turkey after authorities charged him with links to Kurdish militants and Gulen supporters, an accusation he has denied. That case has become a key issue in the worsening diplomatic conflict between the two countries, leading to U.S. sanctions.

(Reporting by Jonathan Allen in New York and Matt Spetalnick in Washington; Editing by Alistair Bell)

Lawyer of U.S. pastor says to appeal to top Turkish court for his release

FILE PHOTO: U.S. pastor Andrew Brunson reacts as he arrives at his home after being released from the prison in Izmir, Turkey July 25, 2018. Demiroren News Agency/DHA via REUTERS/File Photo

ANKARA (Reuters) – The lawyer of an American Christian pastor on trial on terrorism charges in Turkey said he will appeal to the constitutional court on Wednesday to seek his client’s release.

The case of Andrew Brunson, whose next regular court hearing is on Oct. 12, has become the most divisive issue in a worsening diplomatic row between Ankara and Washington that has triggered a punishing regime of U.S. sanctions and tariffs against Turkey.

“We will appeal tomorrow to the Constitutional Court to lift the house arrest,” lawyer Ismail Cem Halavurt told Reuters on Tuesday.

The evangelical pastor is charged with links to Kurdish militants and supporters of Fethullah Gulen, the cleric blamed by Turkey for a failed coup attempt in 2016. He has denied the accusation – as has Gulen – and Washington has demanded his immediate release.

On Monday, President Tayyip Erdogan said Turkey was determined to fight, within legal and diplomatic frameworks, “this crooked understanding, which imposes sanctions using the excuse of a pastor who is tried due to his dark links with terror organizations.”

Halavurt said he did not expect the constitutional court to make a ruling before the Oct. 12 hearing, “but we want to have completed our appeal before (then)”.

Brunson, who has lived in Turkey for two decades, has been detained for 21 months on terrorism charges and is currently under house arrest.

Donald Trump, who counts evangelical Christians among his core supporters, has become a vocal champion of the pastor’s case.

The U.S. president believed he and Erdogan had agreed a deal to release him in July as part of a wider agreement, but Ankara has denied this.

(Reporting by Ezgi Erkoyun; Writing by Ece Toksabay; Editing by Daren Butler and John Stonestreet)

Syria’s Idlib spared attack, Turkey to send in more troops

FILE PHOTO: People inspect the damage at a site hit by airstrikes in the rebel-held city of Idlib, Syria February 7, 2017. REUTERS/Ammar Abdullah

By Tulay Karadeniz and Suleiman Al-Khalidi

ANKARA/AMMAN (Reuters) – Turkey will send more troops into Syria’s Idlib province after striking a deal with Russia that has averted a government offensive and delighted rebels who say it keeps the area out of President Bashar al-Assad’s hands.

The deal unveiled by Russian President Vladimir Putin, Assad’s most powerful ally, and Turkish President Tayyip Erdogan on Monday will create a new demilitarized zone from which “radical” rebels must withdraw by the middle of next month.

Damascus also welcomed the agreement but vowed to continue its efforts to recover “every inch” of Syria. Iran, Assad’s other main ally, said “responsible diplomacy” had averted a war in Idlib “with a firm commitment to fight extremist terror”.

The agreement has put a halt to a threatened Syrian government offensive. The United Nations had warned such an attack would create a humanitarian catastrophe in the Idlib region, home to about 3 million people.

The Idlib region and adjoining territory north of Aleppo represents the opposition’s last big foothold in Syria. Assad has recovered most of the areas once held by the rebels, with decisive military support from Iran and Russia.

But his plans to recover the northwest have been complicated by Turkey’s role on the ground: it has soldiers at 12 locations in Idlib and supplies weapons to some of the rebels.

Erdogan had feared another exodus of refugees to join the 3.5 million already in Turkey and warned against any attack.

In striking the deal, Russia appears – at least for now – to have put its ties with Turkey ahead of advancing the goal of bringing all Syria back under Assad’s rule.

Analysts cautioned that implementation of the deal faced big challenges, notably how to separate jihadists from other rebels – a goal Ankara has been struggling to achieve for some time.

Turkish Foreign Minister Mevlut Cavusoglu said the “moderate opposition” would keep its weapons and the “region will be cleared of radicals”. Turkey would “make additional troop deployments” and its 12 observation posts would remain.

The deal was “very important for the political resolution in Syria”. “If this (Idlib) had been lost too, there would be no opposition anymore,” he said.

Mustafa Sejari, a Free Syria Army (FSA) official, told Reuters the deal “buries Assad’s dreams of imposing his full control over Syria”. The spokesman for the opposition Syrian Negotiations Commission expressed hope that a government offensive was now off the table for good

Yahya al-Aridi told Reuters by telephone it was a “victory for the will for life over the will for death”.

The Syrian government, in a statement published by state media, said it welcomed any agreement that spared blood. It also said the deal had a specific timeframe which it did not detail.

“I see it as a test of the extent of Turkey’s ability to implement this decision,” Ali Abdul Karim, Syria’s ambassador to Lebanon, said in an interview with Lebanon’s al-Jadeed TV. “We do not trust Turkey … but it’s useful for Turkey to be able to carry out this fight to rid these groups from their weapons.”

“CATASTROPHE” AVERTED

Moscow said the deal “confirmed the ability of both Moscow and Ankara to compromise … in the interests of the ultimate goal of a Syrian settlement by political and diplomatic means”.

The European Union said the agreement must protect civilians and allow aid access.

Germany welcomed the deal but noted that past deals in Syria had not been implemented. “Anything that helps to prevent a humanitarian catastrophe in Idlib is good,” German Foreign Minister Heiko Maas said during a visit to Romania.

The demilitarized zone will be monitored by Russian and Turkish forces, the countries’ leaders said.

But neither Russia nor Turkey have explained how they plan to differentiate “radically-minded” rebels from other anti-Assad groups. It was also not immediately clear how much of the city of Idlib fell within the zone.

Putin said the decision was to establish by Oct. 15 a demilitarized area 15–20 km (10-12 miles) deep along the contact line between rebel and government fighters.

Idlib is held by an array of rebels. The most powerful is Tahrir al-Sham, an amalgamation of Islamist groups dominated by the former Nusra Front – an al Qaeda affiliate until 2016.

Other Islamists, and groups fighting as the Free Syrian Army banner, are now gathered with Turkish backing under the banner of the “National Front for Liberation”.

The area is also the last major haven for foreign jihadists who came to Syria to fight the Alawite-led Assad government.

FOREIGN FIGHTERS

Putin said that, at Erdogan’s suggestion, by Oct. 10, all opposition heavy weapons, mortars, tanks, rocket systems would also be removed from the demilitarized zone.

Sinan Ulgen, a former Turkish diplomat and analyst at Carnegie Europe, said it was unclear how Turkey and Russia would be able to separate radical fighters from other rebels.

The hope is that Syrians “will be more inclined to be part of a demilitarization effort” while foreign fighters “have nowhere to go”, he said.

While it is premature to call the agreement a triumph for Turkey, he said: “it does give Turkey more room to implement this more peaceful vision on the ground and pre-empt an attack on Idlib that could have major and disastrous effects on Turkey”.

Earlier this month, Putin publicly rebuffed a proposal from Erdogan for a truce when the two met along with Iran’s president at a summit in Tehran. Iran also welcomed the agreement.

(Reporting by Suleiman Al-Khalidi in Beirut and Tom Perry and Ellen Francis in Beirut, Tuvan Gumrukcu in Ankara, Dominic Evans in Istanbul, Thomas Balmforth in Moscow, Michelle Martin in Germany, Daphne Psaledakis, Alissa de Carbonnel in Brussels; Writing by Tom Perry; Editing by William Maclean)

Exclusive: Turkey boosts arms to Syrian rebels as Idlib attack looms

FILE PHOTO: A man watches as smoke rises after what activists said was an air strike on Atimah, Idlib province March 8, 2015. REUTERS/Ammar Abdullah/File Photo

By Suleiman Al-Khalidi

AMMAN (Reuters) – Turkey has stepped up arms supplies to Syrian rebels to help them stave off an expected offensive by the Syrian army and its Russian and Iran-backed allies in the northwest near the Turkish frontier, rebel sources told Reuters.

Senior rebel officials said Turkey had sent more military aid to rebels in and around the Idlib region since a summit meeting with Iran and Russia last week failed to agree a deal to avert a government offensive into the area.

Turkey, which is already hosting 3.5 million Syrian refugees, is warning against such an attack, fearing it could force more Syrians over the border. President Tayyip Erdogan has warned of a humanitarian disaster and security risks for Turkey.

“They pledged complete Turkish military support for a long, protracted battle,” a senior FSA commander who was privy to talks in recent days with senior Turkish officials said, requesting anonymity as he was not authorized to speak publicly.

The weapons, which have entered Syria in large quantities in recent days, include ammunition and GRAD rockets.

“These arms supplies and munitions will allow the battle to extend and ensure our supplies are not drained in a war of attrition,” the commander added.

A second rebel commander said: “They are getting new shipments of munitions — they don’t need more than munitions.”

“The Turks are making sure they have enough munitions that keep them going for a long while,” he added.

Turkish officials could not immediately be reached for comment.

FILE PHOTO: A Turkish military armoured vehicle guards on the border line located opposite the Syrian town of Atimah, Idlib province, in this picture taken from Reyhanli, Hatay province, Turkey October 10, 2017. REUTERS/Osman Orsal/File Photo

FILE PHOTO: A Turkish military armoured vehicle guards on the border line located opposite the Syrian town of Atimah, Idlib province, in this picture taken from Reyhanli, Hatay province, Turkey October 10, 2017. REUTERS/Osman Orsal/File Photo

AIR STRIKES

The Idlib area forms part of an arc of territory in the northwest representing the last big area held by the opposition.

Some three million people are living in Idlib, half of them Syrians who have fled from other parts of the country.

Russian and Syrian warplanes have stepped up air strikes on southern Idlib and adjacent areas of Hama province in an apparent prelude to a ground offensive. The Syrian army is building up troops near front lines.

Turkey has backed an array of Free Syrian Army (FSA) rebels during the war that spiraled out of an uprising against President Bashar al-Assad in 2011. With decisive Iranian and Russian help, Assad has now recovered most of Syria.

Idlib’s main towns and cities are under the sway of jihadists linked to al Qaeda’s former Syrian affiliate, the Nusra Front, though they are outnumbered by Turkey-backed FSA fighters grouped under “The National Front for Liberation”.

The Turkish army has also deployed in the last week more troops and heavy weaponry to 12 positions in the Idlib region that observe a “de-escalation zone” agreed with Iran and Russia. The Turkish army has also sent troops into Syrian rebel-held territory further east, in an area north of Aleppo city.

With extensive Turkish support, efforts have been underway to organize FSA groups north of Aleppo into a unified force known as the “National Army” numbering some 30,000 fighters.

Two rebel commanders said Turkey had ordered the bulk of this force to move toward the Idlib frontlines.

TEHRAN SUMMIT

At the summit in Tehran, Erdogan, Russia’s Vladimir Putin and Iran’s Hassan Rouhani agreed in a statement that there could be no military solution to the conflict and it could only end through a negotiated political process.

But while Erdogan had also called for a truce, Putin said this would be pointless as it would not involve the Islamist militant groups that Russia deems terrorists, and Rouhani said Syria must regain control over all its territory.

Russia has said Turkey has the job of separating Islamist militants from the moderate opposition in Idlib.

Rebel sources said Turkey had pledged to take strong measures against the jihadists once Russia holds back the Syrian army from waging a major assault.

The jihadists have so far resisted calls by Ankara to dissolve themselves or take an offer that allows fighters to join FSA factions after breaking all ties to al Qaeda.

(Editing by Tom Perry, William Maclean)

Turkey calls for ceasefire in Syria’s Idlib, Russia opposes

Russian President Vladimir Putin meets with his Turkish counterpart Tayyip Erdogan in Tehran, Iran September 7, 2018. Kirill Kudryavtsev/Pool via REUTERS

By Babak Dehghanpisheh

(Reuters) – Turkish President Tayyip Erdogan called for a ceasefire in the rebel-held region of Idlib in northwest Syria on Friday and said an anticipated government assault on insurgents there could result in a massacre.

But Russia’s President Vladimir Putin said Moscow opposed a truce, and Iranian leader Hassan Rouhani said Syria must regain control over all its territory.

The three presidents, whose countries’ are key foreign players in Syria’s long civil war, were speaking at a summit in Tehran aimed at charting a way to end the conflict.

The situation in Idlib, the insurgents’ only remaining major stronghold, is an immediate issue as President Bashar al-Assad’s forces, backed by Russia and Iran, prepare for what could be the conflict’s last decisive battle.

The United Nations has warned a full-scale assault could lead to a humanitarian catastrophe.

But as the leaders gathered in Tehran, Russian and Syrian government warplanes hit rebel-held parts of Idlib, the Syrian Observatory for Human Rights war monitor said.

Tehran and Moscow have helped Assad turn the course of the war against an array of opponents ranging from Western-backed rebels to Islamist militants, while Turkey is a leading opposition supporter and has troops in the country.

Their discussions in Tehran mark a crucial point in a seven-year-old war which has killed more than half a million people and forced 11 million to flee their homes.

Erdogan called on Putin and Rouhani to agree to a ceasefire in Idlib, saying such an accord would be a “victory” of their summit. Turkey could no longer take in any more refugees from any new assault in Idlib, he said.

However, Putin responded that he opposed a ceasefire because Nusra Front and Islamic State militants located there were not part of peace talks. Syria should regain control of all its territory, he said.

“The fact is that there are no representatives of the armed opposition here around this table. And more still, there are no representatives of Jabhat al-Nusra or ISIS or the Syrian army,” Putin said.

“I think in general the Turkish president is right. It would be good. But I can’t speak for them, and even more so can’t talk for terrorists from Jabhat al-Nusra or ISIS that they will stop shooting or stop using drones with bombs.”

FINAL MAJOR BATTLE

Rouhani also said the battle in Syria would continue until militants were pushed out of the whole country, especially in Idlib, but he added that any military operations should avoid hurting civilians.

He called on all militants in Syria to disarm and seek a peaceful end to the conflict.

“The fight against terrorism in Idlib is an indispensable part of the mission to return peace and stability to Syria, but this fight should not harm civilians and lead to a “scorched-earth” policy,” Rouhani said.

Erdogan also said Turkey no longer had the capacity to take in any more refugees from Syria should the government offensive in Idlib go ahead. Turkey has accepted 3.5 million refugees from Syria since the start of the war in 2011.

“Whatever reason there is an attack that has been made or will be made will result in disaster, massacre and humanitarian drama,” he said. “Millions will be coming to Turkey’s borders because they have nowhere to go. Turkey has filled its capacity to host refugees.”

The Assad government was not directly represented at the summit, nor was the United States or other Western powers.

Widely abhorred internationality for the brutal conduct of the war, Assad has largely reclaimed most of Syrian territory though much of it is ravaged.

As the conflict approaches its endgame, Iran, Turkey and Russia are seeking to safeguard their own interests after investing heavily militarily and diplomatically in Syria.

Meanwhile, the fate of Idlib hung in the balance.

“The battle for Idlib is going to be the final major battle,” said Hilal Khashan, a political science professor at the American University of Beirut, told Reuters before the summit.

“It will be waged irrespective of civilian casualties, even though they will make an effort to minimize it.”

(Reporting By Babak Dehghanpisheh; additional reporting by Laila Bassam in Beirut and Dominic Evans in Istanbul, Editing by Angus MacSwan)

Turkey blocks decades-old mothers’ vigil as freedoms suffer

Emine Ocak, (R) mother of Hasan Ocak who went missing in 1995 and a member of "Saturday Mothers", talks with her friend before an interview with Reuters in Istanbul, Turkey, August 27, 2018. Picture taken August 27, 2018. REUTERS/Osman Orsal

By Humeyra Pamuk and Daren Butler

ISTANBUL (Reuters) – Every Saturday for 23 years, dozens of people have held a vigil in a central Istanbul square, sitting in silence and holding pictures of relatives who went missing in police detention.

The group was about to stage their 700th demonstration last Saturday when Turkish police told them their protest was banned, before firing tear gas and plastic pellets to disperse the crowd and detaining dozens – including a 82 year-old woman who was among the first to protest in 1995 in search of her son.

The sit-in by the so-called Saturday Mothers was one of the few remaining public protests near Istanbul’s Taksim square, once a vibrant demonstration ground but now off-limits for opposition groups.

Critics say that breaking up the vigil was another sign that NATO member Turkey is drifting into more authoritarian rule under President Tayyip Erdogan, adding to Ankara’s already deteriorating record on human rights and media freedoms.

Casting the protest as a cover for supporting terrorism, Interior Minister Suleyman Soylu said the Saturday Mothers were linked to the outlawed Kurdistan Workers Party (PKK) and hinted the vigils would no longer be allowed.

“This has been one of Turkey’s oldest civil disobedience movements,” said Ahmet Sik, former journalist and a lawmaker for the pro-Kurdish Peoples’ Democratic Party (HDP), who was at Saturday’s protest.

“There was a time when the police helped these people to do their vigil. To criminalize such an established protest now is an attempt to intimidate the rest of the public,” he said.

Turkey in July lifted a two year-long state of emergency during which 150,000 civil servants were purged and 77,000 people suspected of links to a failed coup in 2016 were charged.

But opponents say Erdogan’s new executive presidency and a counter-terrorism law passed last month equips him with sweeping powers to stifle opposition.

Soylu said on Monday that authorities blocked the sit-in because participants were “trying to create victims through motherhood and mask terrorism through that victimization.”

At a news conference in Istanbul, the group denied links to any militant group and pointed out Erdogan, when he was prime minister in 2011, met them and pledged support.

They also vowed to continue their protest.

“Nobody is using us. Nobody has made us come here,” said Hanife Yildiz, whose son Murat went missing in police detention in 1995.

“I handed over my son to the state and I haven’t gotten him back since.”

‘REPEAT OF THE 1990s’

The silent vigils of Saturday Mothers began as a protest against what they say was the disappearance of relatives in police detention and extrajudicial killings in the 1990s.

At the time, when conflict with the Kurdistan Workers Party (PKK) was at its height, such disappearances and killings were common, mostly in Turkey’s mainly Kurdish southeast.

Emine Ocak, who was briefly detained on Saturday, was among those at the first sit-in after her son Hasan Ocak went missing following clashes with police in Istanbul in 1995.

Soylu rejected that Ocak had gone missing in detention and said he was a member of an ultra-leftist terrorist organization and that he was killed after a row within the group but the Saturday Mothers were trying to put the blame on the state.

Emine Ocak’s picture – the image of a white-haired elderly woman shouting as she was taken by riot police – went viral across Twitter. Her son Huseyin, Hasan’s brother, told Reuters police intervention was unexpected.

“There seems to be a new security approach in the state that very much resembles the one in the 1990s,” Huseyin Ocak said.

“I was there at the meeting with Erdogan on Feb 5, 2011. He said, ‘your problem is my cabinet’s problem.” He also promised to find our relatives, he added.

State investigations have shed light on some of the cases pursued by the Saturday Mothers. A 2011 parliament report found that Cemil Kirbayir, who went missing during a 1980 coup, died under torture.

“Since 1995 we have continued our rightful and silent resistance,” Cemil’s brother Mikail said. “You will not be able to remove us from that square.”

(Editing by Dominic Evans and Alexandra Hudson)

Turkey’s lira weakens 4 percent, Trump says won’t take pastor’s detention ‘sitting down’

A street vendor sells food on a main street in central Ankara, Turkey August 17, 2018. REUTERS/Umit Bektas

By Daren Butler, David Dolan and Humeyra Pamuk

ISTANBUL (Reuters) – Turkey’s battered lira weakened 3 percent on Friday after a Turkish court rejected an American pastor’s appeal for release, drawing a stiff rebuke from President Donald Trump, who said the United States would not take the detention “sitting down”.

The case of Andrew Brunson, an evangelical Christian missionary from North Carolina who has lived in Turkey for two decades, has become a flashpoint between Washington and Ankara and accelerated a widening currency crisis.

The lira has lost nearly 40 percent of its value against the dollar this year as investors fret about President Tayyip Erdogan’s influence over monetary policy.

Heavy selling in recent weeks has spread to other emerging market currencies and global stocks and deepened concerns about the economy, particularly Turkey’s dependence on energy imports and whether foreign-currency debt poses a risk to banks.

Borrowing costs may rise further after both Moody’s and Standard Poor’s ratings agencies cut Turkey’s sovereign credit ratings deeper into “junk” territory late on Friday.

“They should have given him back a long time ago, and Turkey has in my opinion acted very, very badly,” Trump told reporters at the White House, referring to Brunson. “So, we haven’t seen the last of that. We are not going to take it sitting down. They can’t take our people.”

Trump’s comments came after a court in Izmir province rejected an appeal to release Brunson from house arrest, saying evidence was still being collected and the pastor posed a flight risk, according to a copy of the court ruling seen by Reuters.

Brunson is being held on terrorism charges, which he denies. Trump, who counts evangelical Christians among his core supporters, has increasingly championed the pastor’s case.

It was not immediately clear what additional measures, if any, Trump could be considering. U.S. Treasury Secretary Steven Mnuchin told Trump on Thursday that more sanctions were ready if Brunson were not freed.

The United States and Turkey have imposed tit-for-tat tariffs in an escalating attempt by Trump to induce Erdogan into giving up the pastor. Erdogan has cast the tariffs, and the lira’s sell-off, as an “economic war” against Turkey.

The lira last traded at 6.0100 to the dollar at 2159 GMT, 3 percent weaker after tumbling as much as 7 percent earlier. Turkey’s dollar bonds fell, while the cost of insuring exposure to Turkish debt rose.

As the row deepens, Turkey has sought to improve strained ties with European allies. In a telephone call on Friday, Finance Minister Berat Albayrak and his French counterpart Bruno Le Maire discussed U.S. sanctions against Turkey and cooperation between their countries, Albayrak’s ministry said.

SPEED-BUMPS

“Diplomatic negotiations hit speed-bumps and that’s not unusual in these kinds of situations,” said Jay Sekulow, a personal attorney for Trump who is also representing Brunson’s family. “We remain hopeful there will be a prompt resolution. Having said that, we fully support the president’s approach.”

Whatever action the United States takes looks likely to cause more pain for Turkish assets.

People change money at a currency exchange office in Istanbul, Turkey August 17, 2018. REUTERS/Murad Sezer

People change money at a currency exchange office in Istanbul, Turkey August 17, 2018. REUTERS/Murad Sezer

“There has been no improvement in relations with the U.S. and additional sanctions may be on the horizon,” said William Jackson of Capital Economics in a note to clients, adding that the lira could see a downward trend in 2019 and beyond.

Turkey’s banking watchdog has taken steps to stabilize the currency, limiting futures transactions for offshore investors and lowering limits on swap transactions. On Friday, it further broadened those caps.

But some economists have called for more decisive moves.

Turkey and its firms face repayments of nearly $3.8 billion on foreign currency bonds in October, Societe Generale has calculated. It estimates Turkey’s short-term external debt at $180 billion and total external debt at $460 billion – the highest in emerging markets.

Companies that for years have borrowed abroad at low-interest rates have seen their cost of servicing foreign debt rise by a quarter in lira terms in two months.

After each downgrading Turkey by one notch, S&P said it expected a recession next year while Moody’s said a weakening of Turkey’s public institutions had made policymaking less predictable.

Fitch Ratings had earlier said the absence of an orthodox monetary policy response to the lira’s fall, and the rhetoric of Turkish authorities, had “increased the difficulty of restoring economic stability and sustainability”.

DEEP CONCERNS

Albayrak, Erdogan’s son-in-law, told investors on Thursday that Turkey would emerge stronger from the currency crisis, insisting its banks were healthy and signaling it could ride out the dispute with Washington.

Economists gave Albayrak’s presentation a qualified welcome and the lira initially found some support, helped by Qatar’s pledge to invest $15 billion in Turkey.

Deep concerns remain about the potential for damage to the economy, however. Turkey is dependent on imports, priced in hard currency, for almost all of its energy needs.

Erdogan has remained defiant, urging Turks to sell their gold and dollars for lira. But foreign currency deposits held by local investors rose to $159.9 billion in the week to Aug. 10, from $158.6 billion a week earlier, central bank data showed.

Turkish markets will be closed from midday on Monday for the rest of the week for the Muslim Eid al-Adha festival.

(Additional reporting by Ece Toksabay, Tuvan Gumrukcu, and Nevzat Devranoglu in Ankara; Karin Strohecker and Claire Milhench in London; Jeff Mason and Karen Freifeld in Washington; Editing by Catherine Evans and James Dalgleish)

Erdogan says Turkey will boycott U.S. electronics, lira steadies

Businessmen holding U.S. dollars stand in front of a currency exchange office in response to the call of Turkish President Tayyip Erdogan on Turks to sell their dollar and euro savings to support the lira, in Ankara, Turkey August 14, 2018. REUTERS/Umit Bektas

By Daren Butler and Behiye Selin Taner

ISTANBUL (Reuters) – President Tayyip Erdogan said on Tuesday that Turkey would boycott electronic products from the United States, retaliating in a row with Washington that helped drive the lira to record lows.

The lira has lost more than 40 percent 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 worsening ties with the United States.

The lira’s weakness has rippled through global markets. Its drop of as much as 18 percent on Friday hit European and U.S. stocks as investors fretted about banks’ exposure to Turkey.

On Tuesday the lira recovered some ground, trading at 6.4000 to the dollar at 1751 GMT, up almost eight percent from the previous day’s close and having earlier touched 6.2995.

It was supported by news of a planned conference call in which the finance minister will seek to reassure investors concerned by Erdogan’s influence over the economy and his resistance to interest rate hikes to tackle double-digit inflation.

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.

The United States has imposed sanctions on two Turkish ministers over the trial on terrorism charges of a U.S. evangelical pastor in Turkey, and last week Washington raised tariffs on Turkish metal exports.

It was unclear whether Erdogan’s call was widely heeded, but a Turkish news agency said traders in Istanbul’s historic Eminonu district converted $100,000 into lira on Tuesday.

Chanting “Damn America”, they unfurled a banner saying “we will win the economic war”, the Demiroren agency said. Amid calls to “burn” the dollars, the group headed to a bank branch where they converted the money, it said.

Erdogan also said Turkey was boycotting U.S. 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 5 percent.

His call met a mixed response on Istanbul streets.

“We supported him with our lives on July 15,” shopkeeper Arif Simsek said, referring to a failed 2016 military coup. “And now we will support him with our goods. We will support him until the end.”

But shopkeeper Umit Yilmaz scoffed. “I have a 16-year-old daughter. See if you can take her iPhone away … All these people are supposed to not buy iPhones now? This can’t be.”

INVESTMENT INCENTIVES

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.

Although the lira gained some respite on Tuesday, investors say measures taken by the Central Bank on Monday to ensure liquidity failed to address the root cause of lira weakness.

“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 pastor Andrew Brunson.

U.S. national security adviser John Bolton on Monday met Turkey’s ambassador to the United States to discuss Brunson’s detention. Following the meeting, U.S. 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 case was up to the courts and a Turkish judge moved Brunson from jail to house arrest in July. Infuriated by the move, Trump placed sanctions on two Turkish ministers and doubled tariffs on metal imports, adding to the lira’s slide.

Brunson’s lawyer said on Tuesday he had launched a fresh appeal to a Turkish court for the pastor’s release.

(Additional reporting by Ece Toksabay and Ezgi Erkoyun, Writing by Humeyra Pamuk and Dominic Evans, Editing by William Maclean and Jon Boyle)

Erdogan tells Turks to buy free-falling lira as Trump doubles metals tariffs

FILE PHOTO: A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul, Turkey August 2, 2018. REUTERS/Murad Sezer/File Photo

By Behiye Selin Taner and Tuvan Gumrukcu

ISTANBUL/ANKARA (Reuters) – President Tayyip Erdogan told Turks on Friday to exchange their gold and dollars into lira, with the country’s currency in free fall after President Donald Trump turned the screws on Ankara by doubling tariffs on metals imports.

The lira has long been falling on worries about Erdogan’s influence over monetary policy and worsening relations with the United States. That turned into a rout on Friday, with the lira diving more than 18 percent at one point, the biggest one-day drop since Turkey’s 2001 financial crisis.

It has also lost more than 40 percent this year, hitting a new record low after Trump took steps to punish Turkey in a wide-ranging dispute.

Trump said he had authorized higher tariffs on imports from Turkey, imposing duties of 20 percent on aluminum and 50 percent on steel. The lira, he noted on Twitter, “slides rapidly downward against our very strong Dollar!”

“Our relations with Turkey are not good at this time!” he said in an early morning post.

Those duties are double the level that Trump imposed in March on steel and aluminum imports from a range of countries.

The White House said he had authorized the move under Section 232 of U.S. trade law, which allows for tariffs on national security grounds.

While Turkey and the United States are at odds over a host of issues, the most pressing disagreement has been over the detention of U.S. citizens in Turkey, notably Christian pastor Andrew Brunson who is on trial on terrorism charges. A delegation of Turkish officials held talks with counterparts in Washington this week but there was no breakthrough.

Waves from the crisis spread abroad, with investors selling off shares in European banks which have large exposure to the Turkish economy.

The lira sell-off has deepened concern particularly about whether over-indebted companies will be able to pay back loans taken out in euros and dollars after years of overseas borrowing to fund a construction boom under Erdogan.

Erdogan’s characteristic defiance in the face of the crisis has further unnerved investors. The president, who says a shadowy “interest rate lobby” and Western credit ratings agencies are attempting to bring down Turkey’s economy, appealed to Turks’ patriotism.

“If there is anyone who has dollars or gold under their pillows, they should go exchange it for lira at our banks. This is a national, domestic battle,” he told a crowd in the northeastern city of Bayburt. “This will be my people’s response to those who have waged an economic war against us.”

“The dollar cannot block our path. Don’t worry,” Erdogan assured the crowd.

“AMERICAN-MADE CRISIS”

Erdogan, elected in June to a new executive presidency, enjoys the support of many Turks even though food, rent, and fuel prices have all surged. “This crisis is created by America,” said Serap, a 23-year-old clerk at a clothes store in central Istanbul.

However, the Istanbul Chamber of Industry expressed its concern about the lira while some economists were less impressed by the government’s handling of the crisis.

“The basic reason the exchange rate has gone off the rails is that confidence in the management of the economy has disappeared both domestically and abroad,” said Seyfettin Gursel, a professor at Turkey’s Bahcesehir University.

“Confidence needs to be regained. It is obvious how it will be done: since the final decision-maker of all policies in the new regime is the president, the responsibility of regaining confidence is on his shoulders.”

Turkey’s sovereign dollar-denominated bonds tumbled with many issues trading at record lows. Hard currency debt issued by Turkish banks suffered similar falls.

Meanwhile, the cost of insuring exposure to Turkey’s sovereign debt through five-year credit defaults swaps has spiraled to the highest level since March 2009, topping levels seen for serial defaulter Greece, which has three bailouts in the last decade.

THE TWEET AND THE SWORD

New Finance Minister Berat Albayrak – Erdogan’s son-in-law – acknowledged that the central bank’s independence was critical for the economy, promising stronger budget discipline and a priority on structural reforms.

Presenting the government’s new economic model, he said the next steps of rebalancing would entail lowering the current account deficit and improving trust.

This did nothing to revive the currency. “The tweet is mightier than the Turkish sword,” Cristian Maggio, head of emerging markets strategy at TD Securities, said in a note to clients. “Albayrak’s plan was uninspiring at best.”

Erdogan, a self-described “enemy of interest rates”, wants cheap credit from banks to fuel growth, but investors fear the economy is overheating and could be set for a hard landing. His comments on interest rates — and his recent appointment of his son-in-law as finance minister — have heightened perceptions that the central bank is not independent.

The central bank raised interest rates to support the lira in an emergency move in May, but it did not tighten at its last meeting.

 

(Additional reporting by Karin Strohecker, Claire Milhench and Ritvik Carvalho, Lisa Lambert and Susan Heavey; Writing by Humeyra Pamuk and David Dolan; Editing by Dominic Evans, Catherine Evans and David Stamp)

Turkish court rejects U.S. pastor’s appeal for house arrest to be lifted

FILE PHOTO: U.S. pastor Andrew Brunson reacts as he arrives at his home after being released from the prison in Izmir, Turkey July 25, 2018. Demiroren News Agency, DHA via REUTERS

ISTANBUL (Reuters) – A Turkish court has rejected an appeal for U.S. Christian pastor Andrew Brunson to be released from house arrest during his trial on terrorism charges, state broadcaster TRT Haber said on Tuesday.

Relations between Turkey and the United States have spiraled into a full-blown crisis over the trial of Brunson, who was in custody for 21 months in a Turkish prison until he was transferred to house arrest last week.

Brunson, who has been living in Turkey for more than two decades, was accused of helping supporters of Fethullah Gulen, the U.S.-based cleric who Turkish authorities say masterminded the 2016 coup attempt against President Tayyip Erdogan in which 250 people were killed.

He was also charged with supporting outlawed PKK Kurdish militants and espionage.

Brunson’s lawyer, Ismail Cem Halavurt, told Reuters he had not been notified of a court ruling.

Brunson’s next hearing as part of the trial is scheduled for October 12.

(Reporting by Ezgi Erkoyun; Editing by Ece Toksabay and Dominic Evans)