Turkish President Recep Tayyip Erdogan said on Tuesday that Turkey will boycott electronic products from the United States, retaliating in a dispute with Washington that helped drive the lira to record lows.
The lira has lost more than 40% this year and crashed to an all-time low of 7.24 to the dollar early on Monday, hit by worries over Erdogan’s calls for lower interest rates and worsening ties with the US.
The weakness of the Turkish currency has rippled through global markets. Its drop of as much as 18% on Friday hit US and European stocks as investors fretted about banks’ exposure to Turkey.
On Tuesday the lira recovered some ground, trading at 6.53 to the dollar at 09:18 GMT, up around 5% on the day.
It was supported by news of a planned conference call in which the finance minister will seek to reassure investors concerned by Erdogan’s control of the economy and his resistance to interest rate hikes to tackle double-digit inflation .
Erdogan says Turkey is the target of an economic war, and has made repeated calls for Turks to sell their dollars and euros to shore up the national currency.
“Together with our people, we will stand decisively against the dollar, forex prices, inflation and interest rates. We will protect our economic independence by being tight-knit together,” he told members of his AK Party in a speech.
“We will impose a boycott on US electronic products. 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 5%.
The US has imposed sanctions on two Turkish ministers over the trial on terrorism charges of a US evangelical pastor in Turkey, and last week Washington raised tariffs on Turkish metal exports.
Erdogan said his government would offer further incentives to companies planning to invest in Turkey and said firms should not be put off by economic uncertainty.
“If we postpone our investments, if we convert our currency to foreign exchange because there’s danger, then we will have given into the enemy,” he said.