Turkish assets are getting an affirmative relief after President Donald Trump’s threat about Ankara’s military aggression in Syria came up less serious than expectations of markets. Lira of Turkey gained its worth in Tuesday morning trading on the back of a Trump’s statement promising a fifty percent tariff on imports of Turkish steel and announced to halt the trade negotiations between Washington and Ankara. Against lira, the dollar was down 1% for the session, with the currency of Turkey trading at 5.8628/dollar at 08:00 a.m. London time on Tuesday. Senior markets strategist at Bluebay Asset Management, Timothy Ash, said that the threats regarding tariff meager “window dressing from Trump.”
In the second week of October, the lira categorized as the worst-performing major currency of the world as sanctions stress weighed on assets of Turkey. Trump has to threaten to demolish the fragile economy of Turkey over President Tayyip Erdogan’s military aggression into northern Syria against United States-backed Kurdish forces, and an operation Trump basically greenlighted with his surprise announcement to withdraw United States troops from the region and hand charge for dealing with the remaining IS fighters to the Turks. Worldwide chief economist at Renaissance Capital, Charlie Robertson, told an international news website that these seem to be comparatively light sanctions, meant to soothe Congress without cutting the relations of Trump with Erdogan.
Turkey expands assault against Kurdish Forces
The deal between the two states came after a phone call between Erdogan and Trump; the content of the call not publicly identified. Trump’s announcement of Trump received extensive bipartisan criticism from various security officials and lawmakers as an abandonment of U.S.’ Kurd allies governing the area after they lost heavy fatalities helping the United States drive out ISIS. All this compelled Trump to threaten the Turkish government with sanctions if the state went too far in attacking the Kurd forces. Ankara views the Kurd fighters, who were crucial in driving ISIS forces as terrorists out of Syria along with U.S. forces and publicly expresses its goal to crush their presence in Syria.
Trump said in a statement on Monday that the U.S will impose economic sanctions aggressively to target those countries which enable, finance, and facilitate these dreadful acts in Syria. Trump added, he fully equipped to swiftly destroy the economy of Turkey if the leaders of Turkey continue to follow this destructive and dangerous path. No stranger to instability, the Turkish lira previously fell five percent this month against the dollar because of worries about the U.S. sanctions. However, in 2018, it lost about forty percent of its worth against the dollar due to the controversial internal monetary policy moves and a diplomatic fight with the United States that led to undermining tit-for-tat threats of sanctions.
Turkey’s Offense in Syria
The offense of Turkey in Syria, marked with artillery shelling and airstrikes, now in its 7th day within reports of human rights atrocities, the mass fleeing of civilians and ISIS jailbreaks. The United Nations says 1,30,000 people have already displaced, and Kurd forces say over 200 have been killed. Pro-Turkish military detaches the main road between east and west Syrian Kurdish-held territory, blocking the main highway to the Kurd city of Kobani, where United States troops based.
In the meantime, Democratic and Republican lawmakers introduced sanctions bill last week on Turkey that they say should have a veto-proof majority of Congress if disallowed by the president. Robertson said that of Monday’s fewer harsh than projected tariff threats. Whereas this should be obliging for the assets of Turkey, markets will stay nervy, as they cannot be sure this receives sufficient pressure off Trump.