Turkish Lira Tumbles After Trump Approves Plan To Directly Arm Kurds

Update: Reuters confirms that it’s now official:


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Turkey’s ‘sultan for life’ Erdogan will not be happy. NBC News is reporting that two US defense officials have confirmed President Trump has approved a plan to arm the Syrian Kurdish militia – an important U.S. ally in Syria in the fight against ISIS.

As AP confirms, US officials say Trump administration approves providing heavier weapons to Syria’s Kurds, despite “sharp objections” from Turkey.  As a reminder, YPG forces have ties to the Kurdistan Workers’ Party (PKK), which is considered a terrorist group by both the U.S. and Turkey, and yet which due to its location and ideological alignment, has long been an ally of the US. Two weeks ago, the US even went so far as to deploy troops along the Syria-US border after a Turkish airstrike killed several Kurdish fighters.

One of the officials told NBC News that this policy decision is very significant “because it supports the notion that the Syrian Democratic Force is the fighting force that will eventually go in to Raqqa” the erstwile capital of ISIS, which however may soon succumb to allied forces.

The move also reinforces the idea that the entire Syrian Democratic Force, Syrian Kurds (YPG) and the Syrian Arab Coalition, has the backing of the U.S.

The officials could not say what might flow in first or how it would get there, but among the expected options are:

  • Breaching equipment — bulldozers, engineering equipment
  • more effective infantry equipment: rifles, ammunition, armor, communication gear (radios)

The officials said the equipment could be delivered by any number of methods: ground convoys, C-130s, and air drops are all possible, depending on what the equipment is and the area. What’s unclear is whether the U.S. may provide bigger equipment.

The Turks will be notified about this soon and the officials expect a strong reaction from them. In March, Secretary of State Rex Tillerson traveled to Turkish President Recep Tayyip Erdogan, who sees the YPG as terrorists, about his opposition.

Even more shockingly, Reuters reported just minutes ago that U.S. President Donald Trump’s defense secretary emerged upbeat on Tuesday from talks with a Turkish official about the fight against Islamic State but did not disclose any progress toward settling a row over U.S. backing for Kurdish fighters in Syria.

Turkey, a NATO ally, is adamant that Washington should switch support for the planned assault on the Syrian city of Raqqa from the Kurdish YPG militia to Syrian rebels Turkey has trained and led against Islamic State for the past year.

For the U.S. administration, which is skeptical that the Turkish-backed force is large enough or sufficiently trained, the decision sets Trump’s wish for quick battlefield victories against the need to maintain its strategic alliance with Turkey.

“Our intent is to work with the Turks, alongside one another, to take Raqqa down, and we’re going to sort it out and we’ll figure out how we’re going to do it,” Mattis told a news conference, after defense talks with members of the U.S.-led coalition battling Islamic State.

Pressed about the matter, Mattis said he did not want to disclose U.S. battlefield plans but suggested confidence that Washington and Ankara would get past the impasse.

“But we will work it out … War sometimes doesn’t give you all good options. That’s the nature of war. It’s not a good situation,” he said.

Well now we have the answer.

USDTRY has shot up from the 3.59 area towards 3.6200 (*lira weaker against the USD).

As Citi notes, while this is an arms, rather than military intervention plan, the decision is likely to upset the Turkish government. Note this comes amid broad reports of Trump’s new international plans. The Washington Post reported overnight that Trump is weighing a plan to send as many as 5k to Afghanistan following continued pushes from US General John Nicholson, who is the top commander in Afghanistan. Earlier today, he also formally extended the national emergency declaration in Syria.

The next question is – will this cause Erdogan to seek retaliation against Washington’s vassal states in Europe? Or run to Putin? (who also supports the Kurds if only on paper)

This post originally appeared on Zero Hedge


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