US Encouraged Lira's Decline Could Be Used as 'Political Weapon' - Scholar

Turkish President Erdogan said the country had been taking necessary measures regarding the economy in the wake of a slide in the lira currency exacerbated by the dispute with Washington, but that it was important to keep a firm political stance. Erdogan suggested Turkey would stop procuring US-made iPhones and instead buy Korean Samsung or Turkish-made Vestel.

It was unclear how the Turkish president planned to implement the boycott. He also renewed a plea for Turks to convert their dollars into the Turkish lira in order to bolster the currency.

Erdogan has blamed the crash of the lira on America claiming a political, underhand plot had sent the value of his country’s currency falling to record lows.  Sputnik spoke to Prof. Sadik Unay at the Faculty of Economics at Istanbul University, about the impact of the Lira is having in Turkey.

Sputnik: What do you make of the actions by Turkey & America?

Sadik Unay: As you know Turkey and the United States have been going through a diplomatic bottleneck over the course of recent months. 

It had to do with strategic divergence in Syria and many other issues. So it came to a point recently when seemingly trivial issue, like the trial of Pastor Brunson became a tipping point and mutual steps were taken in searing commercial relations and now every day we are hearing different responses from Ankara and Washington DC.

Sputnik: What impact is the slide in lira having on Turkey?

Sadik Unay: All these diplomatic developments are having a great impact on the slide of the lira. This was largely a result of the messages and tweets coming from Trump himself.

Also the fact that the American administration is explaining that they will be imposing sanctions against Turkey.

I think the diplomatic spat between the two capitals and the expectation that the Americans might use their leverage on international investors, investing money in Turkey might be used as a political weapon against Ankara is encouraging the decline in the Lira.

Sputnik: Do you see any way that both sides can return to talks rather than actions?

Sadik Unay: I think such measures will continue in the medium term, it all depends on the reductions on the diplomatic front. As I said the restoration of confidence between the two capitals, given the fact that the Trump administration is moving in a very unpredictable direction by bypassing the state department and going around the diplomatic norms and traditions and etiquette.

If when the Turkish Lira is losing value as it did over the course of the last month, if the US President, sending tweets expressing his satisfaction and pleasure of this development, then it’s hardly comfortable to restore confidence and normal functioning of diplomatic relations.

Views and opinions expressed in this article are those of Sadik Unay and do not necessarily reflect those of Sputnik.