But the souring in U.S. -Turkey relations could give new strength to Russia-Turkey ties, already a source of concern among Turkey's Western allies. While it was true US sanctions on a few top Turkish officials over an American pastor being detained had put more pressure on the lira this past week, this was far from the main reason their currency has been falling so fast. Sanctions and pressure would only serve to harm ties between the two North Atlantic Treaty Organisation allies, Hami Aksoy also said in a statement.
Investors in Turkey are also anxious about President Erdogan's interference in the country's central bank.
The lira's fall has been made worse by President Recep Tayyip Erdogan's statements on economic policy.
"If you have dollars, euros or gold under your pillow, go to banks to exchange them for the Turkish lira".
Has the moment finally arrived when political and economic ties between Turkey and the United States snap, ending what was a very close partnership dating back to the late 1940s?
Turkish newspaper Hurriyet and other media reports quote Erdogan as making the comment to a group of worshippers following traditional Muslim Friday prayers during a visit to the northern city of Bayburt.
The Turkish lira has fallen more than 10% against the dollar after a Turkish delegation in Washington failed to prevent United States sanctions.
The currency has lost almost a third of its value this week.
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Axios reported that the Turkey is trying to lessen their dependence on Russian Federation, and the increased sanctions will make their goal more challenging to reach.
Markets have been deeply concerned about the direction of domestic economic policy under Erdogan with inflation hovering around 16% as the central bank refuses to raise interest rates in response. All week, the lira has been under pressure, which accelerated with the failure of diplomatic talks in Washington this week.
The new set of economic steps are aimed at securing an economic growth of 3-4 percent in 2019, and decreasing the inflation rate to single digits, the ministry said in a press release on August 9.
The new system also increased Erdogan's control over the central bank, which on July 24 baffled markets by leaving rates unchanged despite inflation that in July came in at 15.85 percent.
Erdogan's "tight grip" on the central bank and the fact "higher interest rates do no fit with Turkey's economic growth strategy" meant that the central bank has kept interest rates on hold, Nora Neuteboom, economist at ABN Amro, told AFP.
One of the hard issues affecting U.S.
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 United States may also be needed.
"When it comes to cornering Turkey to extract certain concessions that undermine our sovereign rights, it is a whole another story". Gultekin hopes that some sort of compromise between Turkey and the U.S. can be reached, enabling Erdogan to have an "honourable exit" and come up with a substitute for the International Monetary Fund stabilisation programmes of previous crises.