The U.S. and Turkey each suspended visa services for citizens looking to visit the other country, a sharp escalation of tensions that sent the lira down more than 6 percent against the U.S. dollar.
President Recep Tayyip Erdogan’s government responded in kind, hours after a U.S. move on Sunday to suspend visa services in Turkey. Turkey even repeated verbatim much of the wording of a statement issued by the U.S. in announcing its decision. Both sides said “recent events” had forced them to “reassess the commitment” of the other to the security of mission facilities and personnel.
The moves followed the arrest of a Turkish national who works at the U.S. consulate in Istanbul for alleged involvement in the July 2016 coup attempt against Erdogan.
Only two weeks ago, U.S. President Donald Trump had heaped praise on Erdogan when they met on the sidelines of the United Nations General Assembly in New York, saying the Turkish leader “is becoming a friend of mine” and “frankly, he’s getting high marks.”
The U.S. said Thursday the government was “deeply disturbed” by the arrest, terming charges against the man “wholly without merit,” and by leaks from Turkish government sources seemingly aimed at “trying the employee in the media rather than a court of law.” Turkey responded by saying the arrested Turkish citizen wasn’t part of the U.S. Consulate’s staff but was a “local employee.”
The lira was at 3.7130 per dollar as of 7:15 a.m. in Singapore on Monday, down 2.7 percent from Friday’s close, and touched as low as 3.8533. The currency is heading for a seventh day of declines, the longest stretch since May 2016.
Relations between Turkey, which is a member of NATO, and some Western countries soured after the failed 2016 coup. Erdogan has accused U.S.-based Turkish preacher Fethullah Gulen of organizing the attempted overthrow, and has become increasingly impatient with the U.S. for not turning him over. The lira has lost more than 7 percent against the dollar since reaching a high last month.
In a briefing on Sept. 27, State Department spokeswoman Heather Nauert said the U.S. had received “several requests” for Gulen’s extradition but “haven’t talked about this in a while.”
“We continue to evaluate it, take a look at the materials that the Turkish government has provided us,” Nauert said.
Erdogan in July accused foreigners of attempting to break Turkey apart and vowed to continue to crush “agents” acting against the country. He gained sweeping powers in April after a tight referendum that critics said was fraudulent. A Council of Europe agency has since put Turkey on its watchlist, saying crackdowns on opponents have compromised human rights and the rule of law.
–With assistance from Jordan Yadoo Adam Haigh and Garfield Reynolds
©2017 Bloomberg L.P.