In Turkey, the Second-High Criminal Court in the western Izmir province ruled on Friday that American pastor Andrew Craig Brunson be imprisoned for three years, one month and 15 days, but clarified that he would no longer be under house arrest due to time already served. The court also passed a decree to remove all judicial limitations on Brunson, clearing his house custody and prohibiting travel.
This implies Brunson can fly out of Turkey and go back to the United States. The verdict to liberate him came in the fourth hearing of an espionage case that caused a diplomatic disagreement between Turkey and the United States. Following the verdict, the Turkish Lira strengthened to 5.8670 against the greenback.
Pastor arrest and sanctions on Turkey
Relations between Turkey and the United States were crippled over the past few months following the arrest of Brunson in Turkey on espionage and terror campaign charges. Brunson, who worked as an evangelical cleric at the Evangelic Resurrection Church in the western city of Izmir for the past two decades, was detained in Turkey in September 2016 for suspected links to the PKK and FETÖ, the terror group that coordinated a coup effort on July 15th, 2016.
Brunson was later charged with the “seizure of confidential state information for the purposes of politics and military espionage and attempting to abolish the Grand National Assembly of Turkey, the government of Turkish Republic and constitutional order.”
Charges of espionage and abetting terrorism on behalf of FETÖ and the PKK means the pastor could face a jail term of 35 years.
These allegations sparked the tussle between Ankara and Washington – fueling economic issues in the country. On the 25th of July, quoting Brunson’s health issues, an Izmir court issued a decree to move the pastor from jail to house arrest.
After NATO allies’ attempts to free Brunson were unsuccessful, the White House administration doubled the prevailing import tariffs on Turkish steel and aluminum, while placing sanctions on bureaucrats.
Washington also announced sanctions on Justice Minister Abdülhamit Gül and Turkish Interior Minister Süleyman Soylu for their “leading roles in the organizations responsible for the arrest and detention of Brunson.” Additionally, the US Congress passed a bill postponing the delivery of fighter aircraft F-35 to Turkey. Tensions further increased between the two NATO allies as the sanctions and tariffs led to a sharp decline of roughly 40% in the value of the lira against the dollar in 2018.
Early Friday morning, Brunson was brought from his house, where he had been under custody since July the 25th, to the court in the Aliağa district of western Izmir province for the trial, under rigorous protection.
In the first phase of the hearing that ensued Friday morning, three witnesses surprisingly retracted their earlier testimony, telling Brunson’s association with the radical groups such as the Gülenist Terror Group (FETÖ) and the PKK, and denied any information about Brunson’s potential acquaintances with the groups.
During the hearing, Brunson said “I love Turkey. I’m innocent. I expect to be acquitted of all charges.”
Following the arguments by lawyers representing both sides, the court relieved the pastor of all charges as mentioned earlier in this article.
The Turkish Presidency commented on the ruling with the following statement: “Today’s court ruling on Andrew Brunson reaffirmed that Turkey is a democratic country with the rule of law and established the independence and impartiality of the Turkish judiciary.”
On Friday morning US President, Donald Trump, tweeted: “Working very hard on Pastor Brunson.”
In another tweet, Trump wrote: “My thoughts and prayers are with Pastor Brunson, and we hope to have him safely back home soon!”
Following the court verdict, Brunson, who has resided in Turkey for close to two decades, was escorted to Izmir airport and flown to the US military hospital in Landstuhl, Germany.
The pastor’s release was quickly welcomed by Trump. When questioned about the likelihood of relaxing sanctions on Turkey, Trump pointed out that no agreement had been made for Brunson’s release.
The release of the pastor caused the lira to swing wildly from gains to losses and vice-versa.
Commenting on the developments Cristian Maggio, the head of emerging market research at TD Securities in London, said: “I was expecting the lira to appreciate a bit and the dollar-lira to hit rock bottom in the coming days. While things can still develop in that direction, the absence of a knee-jerk reaction suggests that dollar-lira had already all the good news in the price.”
Fundamentally, further appreciation of the lira is possible only when tensions ease between the US and Turkey.
Technically, the USDTRY pair is moving within a descending channel, as shown in the image below. Therefore, it may prove beneficial if traders have a short position in the currency pair.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
