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Gold trader case threatens economic fallout for Turkey

The sanctions-busting case against Iranian-Turkish businessman Reza Zarrab in the United States has raised the specter of continuing tensions in US-Turkish bilateral ties, with serious implications for the Turkish economy.

Struggling against global headwinds and domestic woes, the Turkish economy is now suffering additional blows, from political tensions between Ankara and Washington. Following an unprecedented spat that led to the mutual suspension of visa services in October, a court case against Turkish nationals accused of violating US sanctions against Iran has emerged as a new flashpoint in bilateral relations amid reports that the main suspect has invoked the name of Turkish President Recep Tayyip Erdogan ahead of the trial, scheduled to begin Nov. 27.

Last week, the embattled Turkish lira tumbled further over developments in the case, including reports that Reza Zarrab, the Iranian-Turkish businessman who allegedly led the sanctions-evading scheme, might be preparing to plead guilty and cooperate with prosecutors. In September, US prosecutors indicted former Economy Minister Mehmet Zafer Caglayan and executives of the state-owned Halkbank for suspected collusion with Zarrab, upping the political stakes in the case.

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