Turkish lira boosted as Pompeo lets slip Brunson could be released soon

The Turkish lira was boosted on Monday (USD/TRY -3.2% on the day at 6.09) as the US Secretary of State, Michael Pompeo, let slip that the administration would be holding talks with Turkey regarding the release of Pastor Brunson.

Pompeo said the pastor, who is scheduled to appear in court on 12 October, might be set free as early as this month, Reuters reported.

Brunson was arrested on terrorism charges, sparking significant tensions between Turkey and the US which led the US President to announce the imposition of tariffs on metal imports from the Mediterranean country, even as he warned that he would make no concessions in return for Brunson’s release.

Turkey responded in kind, levying tariffs on US-made cars, alcohol and tobacco imports.

The spat triggered a massive sell-off in the Turkish lira this summer which some analysts said risked escalating into a full blown crisis and affected sentiment towards other emerging markets.

Turkey’s lira had tumbled by 61% against the US dollar year-to-date, having been impacted as well by concerns surrounding President Tayyip Erdogan’s attempts to influence the central bank and monetary policy.