USA patience with Turkey is seen to have ended, experts said.
The U.S. has already imposed financial sanctions on two Turkish ministers and has warned there could be more measures - the doubling of tariffs might be that move. Put these all together, and you get a pretty classic emerging markets crisis: Money has been leaving Turkey because it can now get good enough returns elsewhere, which is then pushing down the value of their currency so much that their dollar debts are getting harder to pay back.
The lira fell 7% against the dollar to 5.9655 on Friday morning after hitting an all-time low earlier in the session. Because the dollar is the first, or base, currency in the USD/TRY currency pair, the sharp rise on the chart illustrates the dramatic weakening of the lira against the dollar.
It all started with Turkey's own mistakes - or, more accurately, with Turkish President Recep Tayyip Erdogan's.
Erdogan's characteristic defiance in the face of the crisis has further unnerved investors.
Mr Erdogan has been putting pressure on the central bank to not raise interest rates in order to keep fuelling economic growth. He is a fierce opponent of higher interest rates, and backed a wave of fiscal stimulus in the run-up to his re-election in June.
He continued: "A painful admittance that his powers are outmatched by the forces of markets and that he may have misjudged the economic situation may be a lot to ask of the autocratic leader Erdogan, but the alternative is that the lira will meet the ground at terminal velocity; an impact that will damage the Turkish economy for years to come".More news: Manchester United vs. Leicester live stream
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"If they have their dollar, we have the people, we have Allah, " he said.
The lira has been under sustained pressure on foreign exchanges, dropping by nearly 50% against the dollar in the past 12 months.
A man checks foreign currency exchange rates outside a currency exchange shop in an Istanbul's market, Friday, Aug. 10, 2018. The central bank, officially independent, appears to have heeded Erdogan and has not raised rates when many - including the International Monetary Fund - said it should have.
Overnight it had retreated to its lowest since November 2016 on threats of new USA sanctions, weakening beyond the psychologically important 65-per-dollar threshold. Trump, who had secured the release of a Turkish woman activist being held by Israel and just days earlier he had been exchanging fist bumps with Erdogan at a North Atlantic Treaty Organisation summit in Brussels, took it as a personal affront.
Turkish authorities arrested Brunson in December 2016, claiming that he was a spy and was linked to a failed plot to overthrow the government.
Experts, however, were split about Mr Trump's tariffs decision with some fearing it could backfire on US-Turkish relations without helping Mr Brunson's case.
The Russian ruble this week plummeted to its lowest level against the dollar since 2016 as the USA said it was imposing more sanctions on Moscow over a chemical attack in the United Kingdom earlier this year.
Meanwhile the cost of insuring exposure to Turkey's sovereign debt through five year credit defaults swaps has spiralled to the highest level since March 2009, topping levels seen for serial defaulter Greece, which has three bailouts in the last decade. A Russian government statement said the two discussed economic and trade ties, including the success of several joint projects.