ANKARA, Turkey - The Turkish currency has plunged to an all-time low amid concerns over the president's economies policies persisted and as a dispute with the U.S. showed no sign of subsiding.
The lira hit a record low of 6.24 per dollar on Friday, before recovering to 5.94, down 7 percent on the day. The currency has fallen 66 percent since the start of the year.
High level meetings in Washington between U.S. and Turkish officials over a detained American pastor ended this week without an apparent resolution. Washington imposed financial sanctions on two Turkish ministers and warned of additional measures.
President Recep Tayyip Erdogan on Thursday portrayed the currency drop as a "campaign" to harm Turkey.
He said: "If they have their dollar, we have the people, we have Allah."
Turkey's government was due to outline a new economic model on Friday as the worries over debt deepened. Erdogan has sought to keep interest rates low to support economic growth, but independent economists say the central bank should be free to raise rates to rein in inflation and help the currency.
Market analysts warn that Turkey's deteriorating economy could hurt other emerging economies. World stock markets fell Friday, particularly in Europe, as investors worried about the country's financial stability.
Investors are also assessing banks' exposure to the country's currency and budget woes.
Turkey "has continued its spectacular collapse with contagion risks now spilling over to other markets," TD Securities said in a note to clients. "The focus remains on deteriorating politics and its economic implications."
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