The US has threatened to levy more sanctions on Turkey if Ankara does not release an American Christian evangelical pastor held on terrorism charges.
Treasury Secretary Steven Mnuchin suggested during a cabinet meeting on Thursday that the next spiral of tit-for-tat sanctions was coming soon, deepening a spat that has rattled financial markets, if Andrew Brunson is not released by Turkey.
“We have put sanctions on several of their cabinet members,” said Mnuchin. “We have more that we are planning to do if they don’t release him quickly.”
US President Donald Trump prefaced Mnuchin’s remarks by saying that Turkey had not been a very good friend to the US. He later tweeted that the clergyman, who has been detained since 2016 when he was arrested in a government crackdown following a failed coup bid, was a “great patriot” being held “hostage”.
The threat comes as Turkey sought to reassure investors rattled by the sanctions-fueled crash of the Turkish lira, insisting the country would emerge stronger.
On Thursday, Finance Minister Berat Albayrak addressed hundreds of foreign investors from the US, Europe and Asia via a conference call in a bid to soothe the markets.
“Turkey will emerge stronger from these [currency] fluctuations,” Albayrak was quoted by state-run TRT television as saying.
He rejected seeking a bailout from the IMF, an option never seen as likely given that Erdogan often boasts of paying off Turkey’s past IMF debts in May 2013.
The lira has clawed back some ground over the last two days – after losing almost a quarter of its value on Friday and Monday – but economists are warning that Turkey must urgently address its economic imbalances to avoid more trouble.
The lira’s months-long slide has accelerated as a result of the diplomatic standoff with Washington over Brunson’s detention.
A Trump tweet last week announcing a doubling of aluminum and steel tariffs for Turkey triggered the rout in the currency markets.
The lira’s drop in value is certain to further fuel inflation, which is already near 16 percent.
Qatar has pledged to channel $15bn of direct investment into Turkey, a sign of burgeoning ties between the two countries.
Analysts say Turkey is also likely to seek a more dynamic economic relationship with China and Russia, with whom ties have warmed considerably in recent years.
Turkey has also in recent days shown an interest in repairing ties with Europe after a crisis sparked by Ankara’s crackdown on alleged plotters of the 2016 failed coup.
President Recep Tayyip Erdogan and his French counterpart Emmanuel Macron agreed in a phone call to foster trade ties, according to a Turkish presidential source.
Albayrak has also spoken with his German counterpart Olaf Scholz and they agreed to “take steps in order to reinforce economic cooperation”, his office said.