(Bloomberg) — US President Donald Trump praised Turkey’s President Recep Tayyip Erdogan, giving his endorsement to a government that’s faced a week of protests at home and an exodus of foreign capital amid a crackdown on the opposition.
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The remarks will confirm investor expectations that Turkey was likely to face little external political pressure after Ekrem Imamoglu, the popular mayor of Istanbul and Erdogan’s main political rival, was detained and then jailed last week. The lira traded little changed early on Wednesday and markets have started to rebound even as tens of thousands have protested in daily marches in Istanbul.
“Good place, good leader, too,” Trump said during a meeting of ambassadorial nominees on Tuesday. The comments came after a brief introduction by Tom Barrack, the founder of Colony Capital LLC who is Trump’s longtime friend and nominee to be ambassador to Turkey.
“President Erdogan probably feels that he will have good relations with President Trump in the years ahead, as he had” during Trump’s first term in office, Mustafa Akyol, a senior fellow at the Cato Institute’s Center for Global Liberty and Prosperity, said on Bloomberg TV on Wednesday.
Trump’s remarks come as Turkey’s top economic officials have intensified efforts to reassure investors who were unsettled by the political turmoil and its implications for markets. On a call attended by thousands of foreign investors on Tuesday, Treasury and Finance Minister Mehmet Simsek said he’d do “whatever it takes” to stabilize markets, according to people who joined the teleconference organized by Citigroup Inc. and Deutsche Bank, and who asked not to be named because the meeting was private.
Simsek and Turkey’s central bank Governor Fatih Karahan, who was also on the call, made a broad presentation on Turkey’s economy to ease investor concerns on everything from inflation to interest rates and government debt. But lira policy was front and center, the people said.
The currency traded less than 0.1% down at 37.9976 per dollar as of 8:20 a.m. in Istanbul on Wednesday. It’s been held within a tight range below 38 per dollar for six trading days since shock news of the mayor’s detention a week ago briefly sent it plunging more than 10% past 40 per dollar.