ISTANBUL- Finance Minister Berat Albayrak assured international investors on Thursday that Turkey would emerge stronger from its currency crisis, insisting the country’s banks were healthy and signalling it could ride out a row with the United States.

In a conference call with thousands of investors and economists, Albayrak – who is President Tayyip Erdogan’s son-in-law – said Turkey fully understood and recognised all its domestic challenges but was dealing with what he described as a market anomaly.

With Ankara locked in a complex dispute with Washington, he also played down a decision by President Donald Trump to double tariffs on imports of Turkish metals.

Many countries had been the target of similar U.S. trade measures, he said, and Turkey would navigate this period with other parties such as Germany, Russia and China.

The Turkish lira hit a record low of 7.24 to the dollar this week, down 40 percent this year, as investors fretted over Erdogan’s influence over monetary policy and the dispute with the United States.

Facing Turkey’s gravest currency crisis since 2001 in his first month in the job, Albayrak has the daunting task of persuading the investors that the economy is not hostage to political interference.

Albayrak, a 40-year-old former company executive with a doctorate in finance, said Turkey would not hesitate to provide support to the banking sector. The banks were capable of managing the volatility, and there had been no major flow of cash out of deposits lately, he added.

Before he spoke, the lira strengthened more than 3 percent, despite signs that the rift with the United States is as wide as ever.

However, the currency market’s reaction to his conference call – in which he also said Turkey had no plans to seek help from the International Monetary Fund or impose capital controls to stop money flowing abroad – was measured.

After he finished speaking, the lira TRYTOM=D3 was little changed from beforehand, meaning it remained down around 34 percent against the dollar this year.

However, it later made marginal gains, taking it back to where it was earlier in the day as the currency shrugged off U.S. comments ruling out the removal of steel tariffs on Turkey, even if it frees an American pastor who lies at the centre of the feud between Washington and Ankara.

Turkey’s sovereign dollar bonds extended their gains.

QATARI PLEDGE

Economists gave Albayrak’s comments a qualified welcome, and praised his ambition to get inflation into single figures next year from above 15 percent now. However, his father-in-law’s opposition to higher interest rates may complicate that drive.

“He said all the right things, but it’s one thing saying them and another thing doing them,” said Sailesh Lad at AXA Investment Managers. “He said capital controls weren’t part of the agenda, and never will be. I think a lot of the market liked hearing that.”

The lira gained some support from the announcement late on Wednesday of a Qatari pledge to invest $15 billion (£11.8 billion) in Turkey.

Trump has used trade tariffs in a series of disputes ranging from with Turkey and China to the European Union.

In a sign that Turkey may hope to make common cause with other affected countries, Erdogan and French President Emmanuel Macron spoke by phone on Thursday, discussing developing economic and trade ties and boosting bilateral investment, a Turkish presidential source said.

Albayrak will also meet his German counterpart Olaf Scholz in Berlin on Sept. 21.

However, in a potential complication, a foreign ministry source in Berlin said Turkish police have arrested a German citizen. ARD TV reported the man was accused of “terrorist propaganda” after criticising the government on social media.

In another element of the row with Washington, a U.S. court sentenced a senior executive of state-owned Turkish lender Halkbank (HALKB.IS) to 32 months in prison in May for taking part in a scheme to help Iran evade U.S. sanctions. The case has increased speculation that the bank itself could be fined for sanctions-busting.

Halkbank has said all of its transactions were lawful and Albayrak played down the risk. “We are not expecting any fines on Halkbank for sure,” he said. “But hypothetically speaking, …if one of our public banks need help, the government will stand strong by it for sure.”

The White House said on Wednesday that it would not remove steel tariffs on Turkey, appearing to give Ankara little incentive to work for the release of Andrew Brunson, a pastor on trial in Turkey on terrorism charges.

Washington wants the evangelical Christian freed but Turkish officials say the case is a matter for the courts.

The pastor row is one of several between the NATO allies, including diverging interests in Syria and U.S. objections to Ankara’s ambition to buy Russian defence systems, that have contributed to instability in Turkish financial markets.

GRAPHIC – Turkey’s inflation and central bank funding: reut.rs/2KY0Vwd

ECONOMIC WAR

Erdogan has repeatedly told Turks to exchange gold and hard currency into lira, saying the country was involved in an economic war with enemies.

However, Turks appeared not to be heeding his appeal. Central bank data showed foreign currency deposits held by local investors rose to $159.9 billion in the week to Aug. 10, from $158.6 billion a week earlier.

Erdogan has called for a boycott of U.S. electronic goods and Turkish media have given extensive coverage to anti-U.S. protests, including videos on social media showing Turks apparently burning dollar bills and destroying iPhones.