The US is threatening to scale up trade sanctions against Turkey and the Lira continues to plunge following the currency’s significant rebound on Thursday.
Since the beginning of the year, the Lira has lost 40% of its value.
US President Donald Trump reiterated the demand for the release of a US Evangelical pastor, Andrew Brunson, whom Turkey accuses of links to terrorism.
Facing charges of espionage means Brunson could be sentenced to 35 years in prison.
In his latest Tweet on Turkey, US President Trump called Brunson “a great patriot hostage,” promising further action; US Treasury Secretary Steven Mnuchin echoed the same threat on Thursday.
The small rebound in the value of the Turkish Lira came after Qatar pledged $15bn in support of the currency. President Recep Tayyip Erdogan has accused the US of trying to “bring Turkey to its knees” and vows not to succumb to pressure.
The Turkish Minister of Finance and President Erdogan’s son-in-law Berat Albayrak offered assurances on Thursday that the banking system is strong and could weather the current storm. Earlier this week, he had announced measures to boost access to foreign currency reserves and boost liquidity for the lenders.
In an article to the New York Times earlier this month, Erdogan said that Ankara would be looking elsewhere from alliances.
Ankara’s detention of the US pastor has frequently been linked to the refusal by US authorities to extradite the Philadelphia-based cleric Fethullah Gulen, whom Turkey accuses of staging the July 15, 2016 attempted coup.
Russia has recently argued that it was time to abandon the US dollar for international trade transactions, while Foreign Minister Sergei Lavrov visited Ankara on Tuesday to support Turkey in its current standoff with Washington. Thus far, there is no practical dimension in this support.