People change money at a currency exchange office in Istanbul, Turkey, Aug. 10, 2018. The White House thought that Turkey had agreed to release the pastor in exchange for Israel's release of a Turkish woman that had allegedly given funding to Hamas.
UBS chief economist for EMEA emerging markets Gyorgy Kovacs said a giant rate hike of 350-400 basis points would be "consistent with real rate levels that in the past helped to stabilise the currency" but warned a deal to normalise ties with the U.S. may also be needed.
Shares of Turkish steelmakers Kardemir and Erdemir plunged as much as eight percent and 9.9 percent respectively after Trump's tweet.
Concerns mounted Friday after a report in the Financial Times that the supervisory wing of the European Central Bank had over the last weeks begun to look more closely at eurozone lenders' exposure to Turkey.
Turkey, you see, has hurt itself with bad policies, tried to blame foreigners for this fact, but then, unbelievably, seen Trump seem to vindicate their scapegoating by trying to bring their economy down in retaliation for them bringing it down themselves.
Trump said Friday on Twitter that he authorized a new 20 percent tariff on aluminum and 50 percent tariff on steel from Turkey. "The dollar, the mollar, will not cut our path", said Erdogan, adding Turkey had alternatives "from Iran, to Russian Federation, to China and some European countries".
The situation was compounded on Friday when US President Donald Trump tweeted that he had authorised a doubling of tariffs on steel and aluminium.
"Section 232 tariffs are imposed on imports from particular countries whose exports threaten to impair national security as defined in Section 232, independent of negotiations on trade or any other matter", she explained. High level meetings in Washington between USA and Turkish officials ended this week without an apparent resolution. Minutes before Ankara learned about the higher tariffs, the lira had already hit an all-time low of 6.87 against the dollar.
The president's characteristic defiance in the face of a shaky economy has further unnerved investors.
Airliner stolen from Seattle-Tacoma airport crashes
Two military F-15s were scrambled to chase the stolen plane , but local officials said the jets "were not involved in the crash ". Mr Troyer said that he is working with Federal Bureau of Investigation and military personnel as they investigate what happened.
That indicates that people are buying dollars and euros, not selling them off - and that they're not finding buyers in lira, anyway.
It said it would support steel and aluminium exporters on all global platforms, and the U.S. remained an important trade partner. He added that the country will continue to enjoy good economic relations with several major nations.
Relations between the United States and Turkey have not been helped by Turkey jailing an American citizen for an alleged attempted coup in 2016. Mr Brunson denies the charge.
Erdogan enjoys the support of many Turks even though food, rent and fuel prices have all surged. "Turkey will fight economic hitmen just as it fought the coup plotters".
"Confidence needs to be regained". In response, the currency renewed its sell-off.
Treasury and Finance Minister Berat Albayrak - who is Erdogan's son-in-law - was scheduled later on Friday to outline a 'new economic model'.
This did nothing to revive the lira.
Since then Donald Trump and his Vice President Mike Pence have repeatedly demanded his release as Ankara insists the decision is up to the courts.
Erdogan has been putting pressure on the central bank not to raise interest rates in an attempt to help borrowers. He is a self described "enemy of interest rates" and wants banks to lend cheap credit to fuel growth, something experts are anxious could seriously affect the economy.