The beleaguered currency found a moment's respite at as it rise 2.6 percent to 6.70 against the United States dollar after the Turkish central bank pledged liquidity and cut reserve requirements for banks. "Can such a thing be accepted?"
"Cushing may finally start to replenish from critically low inventory levels", said John Kilduff, a partner at Again Capital Management in NY.
After the lira plummeted to a record low overnight, the central bank said in a statement that it would "take all necessary measures to maintain financial stability", and provide banks with all the liquidity they required. However the statement gave no clear promise of rate hikes, which is what most economists and analysts say is needed to ease the crisis.
The latest blow came on Friday, when US President Donald Trump said he had approved the doubling of tariffs on Turkish steel and aluminium.
Andrew Craig Brunson, an evangelical pastor from Black Mountain, North Carolina, arrives at his house in Izmir, Turkey, July 25, 2018.
Addressing a conference in Ankara gathering Turkish ambassadors, he called on Washington to "remain loyal to ties based on traditional friendship and North Atlantic Treaty Organisation alliance" with Turkey.
The drop in the lira was sparked by U.S. sanctions against Turkey, economic conditions in the country, and a strong dollar that is pulling foreign investment out of Turkey and back to the United States. Yet he remained optimistic, saying "it is not at all like we sank and we are finished.The dynamics of the Turkish economy are solid, strong and sound and will continue to be so".
Erdogan upped the ante further in weekend speeches, all but writing off the USA strategic partnership, saying interest rate increases won't happen "as long as I'm alive", and saying those who urge an worldwide bailout are seeking to steal Turkey's political independence - the opposite on all three fronts to what crisis experts would recommend. "With God's permission we will overcome this", he added.
"What is the reason for all this storm in a tea cup?"
"The aim of the operation is to make Turkey surrender in all areas from finance to politics".
European stocks fell on Monday to extend losses from the previous session as fears over the collapse of the Turkish lira continued to spook markets.
On Friday, Erdogan urged the Turkish people to exchange dollars and euros for lira in order to defend the currency.
"I am specifically addressing our manufacturers: Do not rush to the banks to buy dollars. You should know that to keep this nation standing.is the manufacturers' duty".
Erdogan's threat to sever ties with the United States has raised many questions and sparked a debate with the Trump administration.
Speaking at a symposium organized by the Foundation for Political, Economic and Social Research (SETA) in the capital Ankara, Erdoğan said: "For each product we buy from overseas with foreign currencies, we will manufacture better ones and sell them overseas".
He said: 'You act on one side as a strategic partner, but on the other you fire bullets into the foot of your strategic partner.
The Turkish lira has been under pressure for months but nosedived as Washington moved to introduce sanctions over the detainment of a USA pastor, Andrew Branson, who Ankara insists maintains ties with the self-exiled cleric Fethullah Gulen.