As the value of the Turkish lira continued to crash on Monday, President Recep Tayyip Erdogan lashed out at the United States.
“You act on one side as a strategic partner, but on the other, you fire bullets into the foot of your strategic partner,” Erdogan said at a conference in Turkey’s capital of Ankara. “We are together in NATO and then you seek to stab your strategic partner in the back.”
The lira’s 7-percent drop on Monday followed tweets by President Donald Trump on Friday signaling he could increase sanctions on Turkey. “I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!” he wrote. The White House later said that Trump had merely “authorized the preparation of documents to raise tariffs” on metals imported from Turkey.
Nonetheless, economic investors were spooked by signs that Turkey’s economy could become less stable, as the U.S. continued to escalate pressure on Ankara over the detainment of American pastor Andrew Brunson.
Brunson had lived in Turkey for 23 years before his arrest in October 2016. The Turkish government has charged him with political or military espionage and support of a terrorist organization.
On August 1, the U.S. imposed sanctions on two senior Turkish officials over Brunson’s arrest. Two days later, Secretary of State Mike Pompeo discussed the pastor’s detainment with Turkish Foreign Minister Mevlüt Çavuşoğlu. “It’s pretty straightforward. Pastor Brunson is an innocent pastor, and they need to let him return to the United States,” Pompeo told reporters before meeting Çavuşoğlu.
The U.S.’s measures taken in response to Brunson’s detainment have brought relations with Turkey to their worst point in years.
Erdogan described the country’s isolation as an “economic siege” and an “attack against our country.” On Monday, Turkey’s Central Bank said it “will closely monitor the market depth and price formations, and take all necessary measures to maintain financial stability, if deemed necessary,” but did not detail what steps it planned to take.
Turkey’s economic situation has prompted fears from foreign investors. The country’s inflation rate is now at 15 percent, and financial experts worry Turkey could soon experience an economic collapse.
“With an overheated and indebted economy, Turkey will require credibly orthodox economic policies, fiscal discipline and central bank independence to reverse the current situation,” said Agathe Demarais, principal economist at The Economist Intelligence Unit. “A normalization of relations with the U.S. could also reduce the amount of legwork that the central bank will have to do to control the economic situation, but this is unlikely to happen at the moment.”
But Erdogan has claimed the lira’s value is dropping because of a plot, not due to economic factors, according to the BBC. The Turkish Interior Ministry announced on Monday it would pursue legal charges against 346 social media accounts it said were helping spur the currency’s decline.