Turkey Financial Crisis: Stocks at Record Low as Lira Plunges Again

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"I fear that because the markets are being driven by "animal spirits" stemming from external headwinds, there is very little these central banks can do and it would risk concerning investors even further if they start pushing the "panic" button", he said. "We have not made concessions on justice so far, and we will never make any".

The Turkish lira has nosedived in value in the past week over concerns about Erdogan's economic policies and after the United States slapped sanctions on Turkey angered by the continued detention of an American pastor.

On the brink of a full-blown currency crisis, Turkey's lira plunged to a record low Friday, tumbling as much as 18 percent in its biggest daily drop since 2001.

"We will overturn the scenarios that target our nation", he added.

"Washington must give up the misguided notion that our relationship can be asymmetrical and come to terms with the fact that Turkey has alternatives", wrote the Turkish strongman in the New York Times on Saturday.

"You dare to sacrifice 81-million (in) Turkey for a priest who is linked to terror groups?"

Turkey contributes about one percent to the world's total economic output, slightly less than the Netherlands. Mr Erdogan, who has presided over soaring inflation and borrowing levels, said the lira's fall was the result of a plot rather than prevailing economic conditions.

Poland, more than half of whose government, household and corporate debt is denominated in foreign currencies, has seen the zloty fall by nearly as much since the beginning of August.

Additionally, Turkey has a vast amount of debt denominated in U.S. dollars.

Turkey's lira pulled back from a record low to the dollar in morning trading after the central bank pledged to provide liquidity and cut reserve requirements for Turkish banks, but the currency's meltdown is still a major worry for emerging markets and beyond.

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Erdogan rejected speculation that Turkey would seek a rescue package from the International Monetary Found. The U.S. has responded by slapping financial sanctions on two ministers and later doubled steel and aluminum tariffs on Turkey, driving the concerns over Turkey's economy which are rattling global financial markets.

On Monday, US National Security Adviser John Bolton met Turkish ambassador Serdar Kilic at the White House to discuss relations. "This is called carrying out an operation against Turkey", he said.

Overall this year, the lira has lost more than 40 percent against the dollar. While a stronger Dollar puts the U.S.in a weaker position in the ongoing trade war, investors continue to wonder whether Trump will make another attempt to drag the greenback lower.

Investors need to see serious economic measures and not political ones to prevent things getting completely out of control.

Several days later Erdogan accuses Washington of showing an "evangelist, Zionist mentality".

Fethullah Gülen, the leader of FETÖ group that launched the July 15, 2016 coup attempt killing 251 people and injured 2,200 others, also resides in US state of Pennsylvania.

A day later Trump demands Turkey free the pastor "immediately", warning the United States is ready to impose "large sanctions" against Turkey.

Washington's hostility against Ankara has fueled speculations that it would further push Turkey towards Russian Federation.

"Some close the doors and some others open new ones", added Erdogan, who has built closer ties over the last few years with countries from Latin America, Africa and Asia.

Turkish credit default swaps - a hedge against financial turbulence - surged to their highest since the 2008 global financial crisis as the lira took its latest dive.

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