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Qatar to invest $15bn in Turkey amid the lira currency crisis

Qatar, Lira, Trade dispute
The move is seen as payback for Turkey's staunch support after Saudi Arabia, United Arab Emirates and Egypt blockaded Qatar last year

The country had stood by Qatar during the Saudi-led blockade in 2017 and now Doha’s pledge can possibly build investors’ confidence in lira.

Qatar has pledged to invest $15bn in Turkey as Ankara rolls out measures to strengthen the lira amid an ongoing trade spat with the US.

Turkey, which set up a military base in Qatar in 2015, sent more troops as the crisis took hold. It also opened up an airlift to send food to Doha.

President Recep Tayyip Erdogan’s spokesman Ibrahim Kalin tweeted: “Turkish-Qatari relations are based on solid foundations of true friendship and solidarity.”

Sonar Cagaptay, director of the Turkish program at the Washington Institute, called the Qatari investment as a “big deal that could build investor confidence in Turkey, staving off potential economic collapse.”

He continued: “The Qataris believe Turkish troop deployment saved them from Saudi-UAE invasion during the 2017 Qatar-GCC crisis.”

“This may be how Qatar is paying the favour back.” He added.

Qatar’s financial pledge and Ankara’s crackdown on short-selling has helped the lira bounce back. It has now risen to about 5% to TL6.04 against the dollar. There had been fears that Turkey would need a bailout from the International Monetary Fund as the currency plunged more than 20% last week. For now, this situation has been averted.

“This is part of the Turkish government’s strategy to avoid the IMF by finding alternative external support,” Mohamed El-Erian, chief economic adviser at Allianz, said.

Ankara also announced new tariffs on US imports, adding duties of 50% to 140% on alcohol, cars and rice. Erdogan has remained headstrong and has shown no sign of ending his diplomatic spat with Donald Trump.

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