U.S., Turkey resume full visa service after 3-month row

Big 5

The U.S. and Turkey have resumed full visa services, three months after they were suspended amid an escalating feud between the NATO allies. Turkish assets rallied, pushing the stock market to reach a record high.

Services were halted following Turkey’s arrest of a local employee of the U.S. Consulate in Istanbul, who remains incarcerated on terrorism-related charges. The U.S. said Thursday that visa processing was restored after Turkey assured U.S. authorities that no other local employees were under investigation and that local staffers wouldn’t be detained for doing their jobs. Turkey denied it gave the U.S. any assurances, indicating a continuing breakdown in communication between the two sides.

“The Department of State is confident that the security posture has improved sufficiently to allow for the full resumption of visa services in Turkey,” the U.S. statement said. Turkey reciprocated, while expressing its disagreement with the U.S. version of the story.

“We don’t find it proper that the U.S. claims it’s received assurances from Turkey and is misinforming the public, despite the fact that we’ve drawn attention to the issue before,” Turkey’s Embassy in Washington said. “Turkey is a state of law, and our government has given no assurances with regards to ongoing judicial processes.”

Market Rally

Still, the announcement signals an improvement in Turkish-American ties, which have been strained by U.S. support for Kurdish forces camped near Turkey’s border, the trial of a Turkish banker in the U.S. on sanctions violation charges, and Washington’s non-action on Turkey’s request to extradite a Pennsylvania-based Turkish preacher Turkey accuses of instigating a failed coup last year.

Although the U.S. said it remains concerned for its arrested staff in Turkey, the progress in ironing out differences may ease the perception of political risk, a key reason for the lira’s weakness against the dollar in the fourth quarter.

The lira was trading 1.3 percent higher at 3.7666 per dollar as of 6:30 p.m. in Istanbul, trimming losses since the beginning of October to 5.3 percent, the third-worst performance among 24 emerging-market currencies tracked by Bloomberg. The yield on 10-year government bonds fell 22 basis points to 11.72 percent, while the benchmark equity gauge climbed 2.1 percent to close at a record, extending its gain in 2017 to 47 percent.

Source: Bloomberg