Will 'obliterate' Turkish economy if it acts 'off limits' in Syria: Trump

US forces in Syria started pulling back on Monday from Turkish border areas, opening the way for Ankara’s threatened military invasion and heightening fears of a jihadist resurgence.
The withdrawal from key positions along Syria’s northern border came after the White House said it would step aside to allow for a Turkish operation President Recep Tayyip Erdogan has warned could come at any moment.
The diplomatic and political turmoil first erupted late on Sunday when the White House announced it was removing troops in the Syria-Turkey border area and that “Turkey will soon be moving forward with its long-planned operation into Northern Syria”.
That came shortly after a phone call between US President Donald Trump and his Turkish counterpart Erdogan, who has long wanted to target the Kurdish militias operating in Syria.
The move marks a major shift in US policy, and effectively abandons the Kurds, Washington’s main ally in Syria during the years-long battle against the Islamic State jihadist group.
Trump said on Monday he will ‘obliterate’ Turkey’s economy if Ankara does anything that in his ‘great and unmatched wisdom’ he considers to be “off limits” in Syria.
Trump’s extraordinary Twitter warning against NATO ally Turkey came just after the White House announced a US military drawdown in Turkish-Syrian border areas.
That decision appeared to give Turkey a green light to attack its longtime Kurdish foes, even though they have been fighting alongside US forces against the Islamic State extremist group inside Syria.
Trump’s latest tweets appeared to signal a climbdown, following a storm of criticism from his own Republican party that he was betraying the Kurdish guerrillas.
“If Turkey does anything that I, in my great and unmatched wisdom, consider to be off limits, I will totally destroy and obliterate the economy of Turkey (I’ve done before!),” he wrote.
The Syrian Democratic Forces (SDF), the Kurdish-led militia that controls much of northeastern Syria, said early on Monday in a statement that “US forces withdrew from the border areas with Turkey”.
The Syrian Observatory for Human Rights war monitor confirmed that US forces had pulled back from key positions in Ras al-Ain and Tal Abyad.
A US base in Ras al-Ain was empty of personnel on Monday, said an AFP photographer, who had seen troops there the night before. Turkey has sent reinforcements to the border in recent weeks, and Erdogan said Monday in televised remarks the long-threatened offensive could “come any night without warning”.
His comments came after Foreign Minister Mevlut Cavusoglu said on Twitter that Turkey was “determined to ensure our country’s existence and security by clearing terrorists from this region”.
He was referring to the SDF, which has ties to Kurdish militants inside Turkey and which Ankara considers a terrorist organisation.
Fearing yet another chapter of bloodshed and mass displacement in the Syrian conflict, the United Nations said it was “preparing for the worst”.
The European Union warned that civilians would once again bear the brunt of a military assault.
In its statement, the White House made clear it would stand aside when its NATO ally Turkey moves in.
Trump on Monday said the region would have to “figure the situation out” and that America needed to get out of “ridiculous endless wars.” But US Senator Lindsey Graham called the move “a disaster in the making” and “a stain on America’s honour,” warning of a Senate resolution demanding the White House alter course. SDF spokesman Mustefa Bali said Washington’s decision “is about to ruin the trust and cooperation between the SDF and US”.

Rupee hits record low of 70.08 a dollar, Turkey rout complicates RBI's job

There's not a moment of respite for India's inflation-targeting central bank.
Just when gains in consumer prices eased, the Turkish lira-led sell-off in emerging-market currencies has renewed an onslaught on the rupee, pushing it to a record low and possibly demanding more rate action from the Reserve Bank of India.
The rupee dropped to as low as 70.08 per dollar on Tuesday, keeping intact its position as Asia's worst-performing currency this year. The currency reversed losses to close 0.1 per cent higher at 69.8963 in Mumbai, with traders saying state-run banks sold dollars, probably on behalf of the RBI.
"Deteriorating emerging-market sentiment has led to a panic in the rupee," said Paresh Nayar, the Mumbai-based head of currency and money markets at the local unit of South African lender FirstRand Ltd. The price action suggests the RBI might have intervened to prevent a bigger run on the rupee, he said.
A weaker currency complicates the central bank's job of keeping prices in check, as it makes imports costlier. The monetary policy committee led by Governor Urjit Patel increased interest rates twice since June to curb rising price pressures, while the RBI depleted $23 billion in foreign reserves to check currency volatility.
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Government data on Monday showed retail inflation quickened 4.17 per cent in July from a year earlier, slower than the 4.5 per cent median estimate in a Bloomberg survey of economists. Gains in wholesale prices eased for the first time in five months, Commerce Ministry data showed Tuesday.
"The weak rupee is indeed making life difficult for Patel and his fellow members of the monetary policy committee," said Hugo Erken, a senior economist at Rabobank International in the Netherlands. "The RBI tightening cycle will put an end to the current free fall."
A gain of more than five per cent in the Turkish lira and broad weakness in the greenback also helped boost sentiment toward emerging-market currencies on Tuesday. The rupee has lost 8.6 per cent this year.

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The currency woes come against the backdrop of an economy that's growing faster than any other major nation. Earlier this month, the RBI raised rates to the highest in two years.
The weakness in the rupee is nothing to worry about and is due to external factors that may ease, Subhash Chandra Garg, economic affairs secretary in India's finance ministry, said in New Delhi, adding that he wouldn't worry even if it fell to 80 per dollar tracking regional currencies.
Indian sovereign bonds ended the day little changed. The yield on the benchmark 10-year notes fell 1 basis point to 7.82 per cent after rising seven basis points on Monday. Indian markets are shut Wednesday for Independence Day holiday.
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For more, see our India Insight Global risks, such as high oil prices and trade tensions, are weighing on the growth outlook, the International Monetary Fund said in its recent report on India that likened the economy to an elephant that's started to run. Despite the headwinds, the latest high-frequency indicators like the purchasing managers' surveys show that India's start to the July quarter has been strong.
"The good old issues of large unhedged exposure, worsening current-account deficit, worries on fiscal deficit and uncertainty heading into elections" are playing out once again in the backdrop of general concern around emerging markets, said Gopikrishnan MS, head of foreign exchange, rates and credit for South Asia at Standard Chartered Plc in Mumbai. With fresh pressure on EMs, the rupee is expected to move in a range of 71-72 against the dollar, he said.
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The central bank's position is that it does not target the exchange rate and is mandated to keep inflation at the 4 per cent midpoint of its targeted band in the medium term. The RBI raised inflation forecast for the six months to March 31 to 4.8 per cent from 4.7 per cent.