Qatar’s emir travels to crisis-hit Turkey in show of support

Turkey's President Recep Tayyip Erdogan gestures as he delivers a speech to Turkish ambassadors at the Presidential Palace in Turkey Monday Aug. 13

Turkey's President Recep Tayyip Erdogan gestures as he delivers a speech to Turkish ambassadors at the Presidential Palace in Turkey Monday Aug. 13

In a decision announced in the Official Gazette, Ankara said it was imposing extra tariffs on imports of products including rice, vehicles, alcohol, coal and cosmetics.

Turkey doubled tariffs on some USA imports, including alcohol, cars and tobacco on Wednesday in retaliation for US moves, while the lira rallied further after the central bank's liquidity moves had the effect of supporting the currency.

"We expect that Turkey will have to introduce deep fiscal and monetary tightening to stabilise the Turkish lira, which in turn will dampen economic activity further".

The new round of tariffs followed President Erdogan's call on Tuesday to boycott United States electronic products and earlier urging Turks to sell their dollars and euros to prop up the lira.

US President Donald Trump authorised increased tariffs against Turkey on Friday in response to Turkey's unwillingness to release an American evangelical pastor, Andrew Brunson.

As President Recep Tayyip Erdogan intensified a diplomatic feud with his USA counterpart Donald Trump with a spate of new import tariffs, the nation's banking regulator published new rules that have so far succeeded at lifting the lira off record lows.

Qatar has pledged $15 billion of direct investment in Turkey's financial markets and banks.

Turkey, which has a military base in Qatar, rushed through supplies to the Gulf state after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt imposed the boycott.

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.

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The rebound in the Turkish currency to stronger than 6.0 against the USA dollar was driven by a banking watchdog's step to limit swap transactions and by hopes of improved relations with the European Union.

The tensions and the tariff hike by the U.S. have caused the Turkish lira to bleed value, fanning fears the country is on the verge of an economic crisis that could spillover into Europe.

In another unconventional step, the regulator said that until markets "normalize", it would temporarily stop applying the effect of day-to-day losses on the securities held by banks to their capital adequacy ratios.

"Our relations with Turkey are not good at this time!" he wrote.

Earlier on Wednesday, Erdogan spoke on the phone with German Chancellor Angela Merkel, the Turkish presidency.

State-run Anadolu Agency quoted Trade Minister Ruhsar Pekcan as saying: "We have responded to the sanctions with $533 million dollars of extra tax".

A court in Izmir rejected the appeal, but a higher court would review the appeal, the report said.

A Turkish court on Wednesday denied an appeal from pastor Andrew Brunson to be released from house arrest.

Kevin Hassett, chairman of the White House Council of Economic Advisers, noted on Monday that those tariffs involve only a "tiny, tiny fraction" of Turkey's gross domestic product.

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