Turkish lira dives after inconclusive Erdogan-Biden assembly

ISTANBUL ­— Turkey’s lira fell as a lot as 1.5% Tuesday after a extremely anticipated assembly on Monday between US President Joe Biden and his Turkish counterpart Recep Tayyip Erdogan ended with out clear progress on bilateral tensions.

The two leaders met for the primary time as presidents on the sidelines of the NATO summit in Brussels, and whereas each relayed optimistic statements following the discuss, markets reacted negatively on unmet expectations over a compromise relating to Ankara’s 2019 acquisition of Russian-made S-400 missiles, which stay a key level of rivalry in US-Turkey relations.

The lira dove to eight.58 towards the greenback early Tuesday, erasing beneficial properties made final week on investor optimism forward of the assembly. The forex’s slide started shortly after Erdogan reiterated his views on preserving the S-400 missiles in Turkey in feedback to reporters Monday night.

“Our thoughts on the S-400 are the same as before; I relayed our same thoughts to Mr. Biden,” Erdogan stated.

In the previous, US and NATO officers have acknowledged the missiles pose a safety risk to alliance protection methods inside Turkey, whereas the Biden administration has maintained the stance that Ankara should take away the S-400s from Turkish territory to normalize ties and carry US sanctions imposed on account of the acquisition. Turkey was additionally suspended from NATO’s F-35 fighter jet program shortly after the missile acquisition.

Expectations of a doable compromise started to take kind in early February, when Turkish Defense Minister Hulusi Akar stated officers would pursue options just like the “Crete model,” which might see the S-400s relocated exterior Turkish borders.

More just lately, rumors have circulated over the likelihood that Ankara officers would suggest transferring the S-400s to Incirlik airbase in southern Turkey, the place they might be monitored by US navy personnel. The thought gained momentum in late May after Ankara acknowledged it will ship home Russian missile consultants overseeing the S-400s.

Yet after the Biden-Erdogan assembly Monday, which ended with out detailed statements nor a White House readout on the matters mentioned, observers have been left ready to see what steps the allied nations will take subsequent in addressing grievances on either side.

“We had a optimistic and productive assembly, a lot of it one-on-one,” Biden informed reporters in Brussels Monday, including, “Our teams are going to continue our discussions and I’m confident we’ll make real progress with Turkey and the United States.”

One space of doable US-Turkey cooperation within the near time period might come through Erdogan’s proposal to keep Turkish troops in Afghanistan to guard and oversee operations at Kabul’s worldwide airport as American troopers withdraw from the nation this yr.

Other factors of collaboration with NATO allies embody Turkish-French discussions to expel overseas mercenaries from the continued battle in Libya, in addition to efforts to proceed dialogue between Ankara and Athens to de-escalate disputes over maritime boundaries within the japanese Mediterranean Sea.

Cooperation on Syria and assist deliveries to displaced populations in Turkish-controlled areas current one other realm the place some US and Turkish pursuits align, Emre Peker, a director on the Eurasia Group, informed Al-Monitor, including, “but beyond that I think we’re looking at a long-term decline in US-Turkey relations despite the positive spin coming out of yesterday’s meeting.”

Ankara harbors its personal listing of grievances with the United States, together with Washington’s ongoing assist for Kurdish militants in northern Syria, the US refusal to extradite exiled cleric Fethullah Gulen, who Ankara claims orchestrated a failed 2016 coup, and ongoing authorized proceedings towards the Turkish state financial institution Halkbank for its function in serving to circumvent US sanctions on Iran.

Peker stated US-Turkey cooperation would possible change into extra “transactional” or “opportunistic” when pursuits align, saying he anticipated little short-term progress on variations over the S-400 concern.

“That road map has been out there since the purchase of the S-400s,” Peker informed Al-Monitor. “It’s just that the road was never taken, and I don’t anticipate either Ankara or Washington to take that road in the near future, so I think investors were getting a little bit ahead of themselves with their optimism” forward of the Biden-Erdogan assembly.

Following the assembly Monday, Erdogan stated Turkey’s overseas and protection ministers would proceed to carry discussions with their US counterparts relating to the S-400 missiles and doable options.

Speaking Tuesday, Erdogan’s governing coalition companion Devlet Bahceli, chair of Turkey’s Nationalist Movement Party (MHP), accused the United States of fostering double requirements in its relations with Ankara.

“The continuation of [US] pressure and sanctions policies against Turkey in their current state will damage ties between the two countries in many ways,” Bahceli told MHP lawmakers in Ankara. “The same United States has applied a double standard against Turkey as it holds channels of diplomacy and negotiation open with other countries with whom it has problems.”

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