Turkey's lira took yet another dive on Friday,
Plunging 8 and a half percent to 6.30 against the dollar before a slight recovery.
It happened after the U.S. warned more economic sanctions were on the way,
Unless Turkey hands over detained American pastor Andrew Brunson.
The fall-out with the U.S. is partly why the lira has lost nearly 40 percent of it value this year.
(SOUNDBITE) (Turkish) TURKISH BUSINESSMAN WHO SELLS CONSTRUCTION MATERIAL, KIRAL ACAR, SAYING:
"We shouldn't make concessions. The U.S. is far away but it wants to show its political strength in this region therefore, there is not much we can do. Let's keep up the resistance."
On Thursday, Turkey's Finance Minister sought to reassure investors,
Saying Turkish banks would emerge 'stronger' from the crisis.
Not all analysts were convinced...
(SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA, JAMES BEVAN, SAYING:
"In the near term what we have are Turkish companies who have borrowed in foreign currencies are now going to have to service therefore a materially higher charge for their debt so that's going to be very painful. And of course that will knock through to the banks which are essentially bellwethers for the economy."
The lira's struggles have investors worried about a possible knock-on effect for emerging markets...
It brings up memories of Asian financial trouble in 1997 and Turkey's own 2001 crisis.
Those shadows of the past have led to a wave of selling across emerging market assets this week.
(SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA, JAMES BEVAN, SAYING:
"I would say we're not heading for a 1990s crisis because we don't have the risk of contagion from Turkey which we had within the Asian tigers in the 1990s. That said I do think that tighter global credit and liquidity conditions will be damaging for emerging markets writ large because they have been one of the principal beneficiaries of global credit and fund flows in recent years."
Deep concerns remain for Turkey's economy,
Particularly whether Turkish firms can afford to service their debt,
Despite that - Turkey's President Erdogan is defiant.
Calling on Turks to sell their gold and dollars for lira as part of an 'economic war'.
