Turkey accuses Topuz of having links to Pennsylvania-based opposition cleric Fethullah Gulen.
Following the arrest, the US placed visa restrictions on Turkish citizens seeking to enter the US. When Turkey responded in kind the Turkish Lira Took a 6.6% Dive.
The Turkish lira slumped as much as 6.6% against the U.S. dollar on Monday after a spat over visas between the two countries intensified.
The nosedive in the currency came after the U.S. embassy in Ankara announced late Sunday that it would cease processing most kinds of visas for Turkish citizens.
Turkey’s embassy in Washington D.C. quickly responded in kind, saying it would halt visa applications for Americans. The lira clawed back most of those losses by late morning Hong Kong time and was trading down about 2.8% versus the dollar.
Turkey wants Gulen, who it blames for last year’s attempted coup, extradited from the U.S. to Turkey. Topuz is the second U.S. government employee in Turkey to be arrested this year.
The latest moves by both governments mean they will stop processing all visas except those for applicants who are seeking to emigrate. That will make it much harder for Americans to visit Turkey for business or leisure.
CNN notes the US maintains 50 nuclear weapons in Turkey housed at the US air base at Incirlik. The weapons are Cold War-era B-61 “gravity” bombs.
“It’s an open secret” the bombs are at Incirlik, Joshua Walker of the German Marshall Fund, who specializes on US-Turkey relations, told CNN.
Turkey Chooses Russia Over NATO for Missile Defense
In the clearest sign of his pivot toward Russia and away from NATO and the West, President Recep Tayyip Erdogan announced on Tuesday that Turkey had signed a deal to purchase a Russian surface-to-air missile system.
The deal cements a recent rapprochement with Russia, despite differences over the war in Syria, and comes as Turkey’s ties with the United States and European Union have become strained.
It is certain to stir unease in Washington and Brussels, where officials are trying to keep Turkey — a longtime NATO member, and an increasingly unlikely candidate for European Union membership — from entering Russia’s sphere of influence.
Although a prospective missile purchase from Russia was made public several months ago, Mr. Erdogan’s announcement was the first confirmation that Turkey had transferred money to pay for the missile system, known as the S-400.
Mr. Erdogan’s announcement of the deal with Russia came after Germany said that it was suspending all major arms exports to Turkey because of the deteriorating human rights situation in the country and the increasingly strained ties
The real fireworks start when Turkey threatens to close US air base at Incirlik.
Mike “Mish” Shedlock