Lira takes another hit as US pastor loses appeal

ISTANBUL • Turkey's battered lira weakened 3 per cent on Friday after a Turkish court rejected an American pastor's appeal for release, drawing a stiff rebuke from President Donald Trump, who said the United States would not take the detention "sitting down".

The case of Andrew Brunson, an evangelical Christian missionary from North Carolina who has lived in Turkey for two decades, has become a flashpoint between Washington and Ankara and accelerated a widening currency crisis.

The lira has lost nearly 40 per cent of its value against the dollar this year as investors fret about President Recep Tayyip Erdogan's influence over monetary policy.

Heavy selling in recent weeks has spread to other emerging market currencies and global stocks and deepened concerns about the economy, particularly Turkey's dependence on energy imports and whether foreign-currency debt poses a risk to banks.

Borrowing costs may rise further after both Moody's and Standard & Poor's ratings agencies cut Turkey's sovereign credit ratings deeper into "junk" territory late on Friday.

"They should have given him back a long time ago, and Turkey has in my opinion acted very, very badly," Mr Trump told reporters at the White House.

Mr Trump's comments came after a court in Izmir province rejected an appeal to release Brunson from house arrest, saying evidence was still being collected and the pastor posed a flight risk, according to a copy of the court ruling seen by Reuters.

Brunson is being held on terrorism charges, which he denies.

The US and Turkey have imposed tit-for-tat tariffs in an escalating attempt by Mr Trump to induce Mr Erdogan into giving up the pastor.

REUTERS

A version of this article appeared in the print edition of The Sunday Times on August 19, 2018, with the headline 'Lira takes another hit as US pastor loses appeal'. Print Edition | Subscribe