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Turkish president says country will boycott iPhones

15 Août 2018

During his speech, Erdogan singled out the iPhone as a notable American import.

The announcement came in his address to a symposium organized by the Foundation for Political, Economic and Social Research (SETA) on the 17th foundation anniversary of the ruling Justice and Development (AK) Party.

Turkey's president appeared to escalate a dispute with the United States that has helped foment a Turkish currency crisis, claiming Tuesday that his country will boycott US-made electronic goods. "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 five percent.

Melike Turkes, a mother-of-three shopping in central Ankara, said she was anxious about how the lira's fall could affect the cost of her weekly groceries. But "thanks to God, our economy is functioning like clockwork", he maintained.

Turkey is especially exposed, where non-bank borrowers - a broad group including government, households and most corporations - held US$195-billion in debt denominated in USA dollars at the end of previous year, "or a stunning 23 per cent of [gross domestic product]", according to National Bank Financial.

The growing interconnectedness of the world economy means that the recent sharp decline in the value of the lira poses risks for other fragile emerging market economies, which in turn pose risks for the developed world.

He added that the industry aimed to cut the current account deficit in half this year. This difference between import and export of goods and services has been filled through external borrowing in foreign currency. Earlier this week it was reported that Erdogan has accused the United States of stabbing them in the back. Turkish economy's body is solid. And there are already signs that it's dragging down markets in Asia.

Speculators, sensing an opportunity to make a quick profit, have piled into the market, "shorting" the lira and the Turkish stock market, that is, betting that they will fall further.

The dispute between the North Atlantic Treaty Organisation allies - brought to a new intensity by Turkey's holding of an American pastor for two years - has raised questions over the future of their partnership and fanned fears of a looming economic crisis in Turkey.

The American pastor at the centre of the spiralling diplomatic row between the USA and Turkey has launched a new bid for freedom 22 months after he was detained on terror-related charges.

The Turkish envoy conveyed the message the pressure and threats would only lead to a "chaos" in relations which could only improve after Washington abandons the language of "threats", Cavusoglu said. The country's local currency, the lira, has since plummeted in value.

The imprisonment of U.S. pastor Andrew Brunson has weighed heavily on relations, leading to a series of escalations.

Andrew Brunson is an American pastor who has been detained in Turkey for nearly two years since October 7, 2016.

Turkey's Treasury and Finance Minister Berat Albayrak has said Ankara will continue taking steps within the rules of the free market. Erdogan's authoritarian hand has distanced the country from traditional Western allies and hit confidence.

However, there was no indication that interest rates would be raised to curb inflation and cool the overheated economy.

Turkish president says country will boycott iPhones