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(SKY NEWS) – Qatar has pledged to invest $15bn (£11.8bn) in Turkey as Ankara rolls out measures to strengthen the lira amid a trade spat with the US.
The move is seen as payback for Turkey’s staunch support after Saudi Arabia, United Arab Emirates and Egypt blockaded Qatar last year.
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, described the Qatari investment as a “big deal that could build investor confidence in Turkey, staving off potential economic collapse”.
He added: “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.”
Qatar’s financial pledge and Ankara’s crackdown on short-selling helped the lira bounce back, rising about 5% to TL6.04 against the dollar.
There had been fears that Turkey may need a bailout from the International Monetary Fund as the currency plunged more than 20% last week.
“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.
Mr Erdogan has shown no sign of ending his diplomatic spat with Donald Trump over an American pastor held in Turkey for two years.
However, the Turkish leader has attempted to mend fences with Germany by holding talks with Chancellor Angela Merkel over bilateral ties.
Tensions between the two nations were ramped up after Ms Merkel’s government blocked Turkish ministers addressing rallies in Germany ahead of a referendum to give Mr Erdogan presidential powers last year.