After Turkish Media Reports, US Denies Agreement on Pastor Brunson

Spokeswoman of the U.S. State Department denied media reports that the Turkish and U.S. officials reached a preliminary accord on Pastor Andrew Brunson who is currently under house arrest in Turkey.

As a senior Turkish diplomat is set to visit Washington, D.C., to hold high-profile talks with the U.S. authorities to resolve a conflict that significantly strained ties and sent the Turkish lira into record lows against the U.S. dollar and euro.

“If we had reached any kind of agreement [with Turkey], you would see Pastor Brunson back here at home along with the other American citizens,” State Department Spokeswoman Heather Nauert said on Tuesday.

Deputy Foreign Minister Sedat Onal will head a large nine-member delegation with officials from Turkey’s justice, finance and foreign ministers to discuss the matter. When the Turkish media first reported over the delegation’s visit, it also said a preliminary agreement has been reached.

But Nauert rejected those claims.

The Turkish economy has shown signs of great distress amid the ensuing dispute. Last week, U.S. Treasury Department imposed sanctions on Turkey’s justice and interior ministers over their role in the detainment of the pastor.

It blocked Justice Minister Abdulhamit Gul and Interior Minister Suleyman Soylu‘s properties and assets within the U.S. jurisdiction, banning all the U.S. firms and individuals from engaging in transactions with the two ministers.

The move sparked a retaliatory measure from Ankara, with President Recep Tayyip Erdogan noting that Turkey also placing sanctions on U.S. interior and justice secretaries.

The escalation of the dispute has an immediate fallout on the Turkish economy. It caused a remarkable depreciation of the value of Turkish lira as it tumbled to 5.30 against the U.S. dollar on Monday.

The freefall of the lira aroused concerns in jittery markets and among international investors.

The U.S. embassy in Ankara released a rare statement dismissing reports by the Turkish media after it suggested a U.S. official in the embassy was quoted as saying that the Turkish lira would hit 7 against the U.S. dollar.

“This is a fabricated and baseless lie,” the embassy statement said.

“Despite the current tensions, the United State counts Turkey as a solid friend and ally. Our countries have a vibrant economic relationship,” it noted.

U.S. investment bank Goldman Sachs earlier warned in a note that a further drop in the lira to 7.1. to the dollar “could largely erode” the ecess capital of Turkish banks.