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Comments from President Recep Tayyip Erdogan and Finance Minister Berat Albayrak over the weekend that a plan would be revealed on Monday to calm the markets failed to restore confidence.

The announcement came in his address to a symposium organized by the Foundation for Political, Economic and Social Research (SETA) on the 17th foundation anniversary of the ruling Justice and Development (AK) Party.

As Turkey's central bank attempted to shore up the financial system yesterday, Erdogan accused the United States of trying to "stab it in the back". But most of those reports are done, and Sandven, of US Bank, said stocks may spend the next two months wavering.

The dispute with the U.S. has centered on the continued detention of an American pastor who is on trial for espionage and terror-related charges. The U.S. has responded by slapping financial sanctions on two ministers and later doubled steel and aluminum tariffs on Turkey.

Countries that, like Turkey, have large amounts of debt denominated in foreign currencies are especially in the firing line.

Albayrak also said a plan has been prepared for banks and the real economy sector, including small to mid-sized businesses, which are most affected by the foreign exchange fluctuations.

Turkey and the United States have disagreed on a number of issues in recent years, including the war in Syria and a USA refusal to extradite Fethullah Gulen, a cleric Erdogan claims is behind the botched attempt to unseat him.

On Monday, Turkey's central bank announced measures to help that country's banks, but the Turkish lira and Turkey's stock market continued to slide.

"I say from Trabzon, we have seen your game, what they have not been able to do with provocation and coup, they are now trying to make money through money", said Recep Tayyip Erdogan.

The lira tumbled alongside the country's benchmark equity index after President Recep Tayyip Erdogan maintained his defiance toward the US and financial-market orthodoxy in speeches on Sunday.

An important emerging market, Turkey borders Iran, Iraq and Syria and has been mostly pro-Western for decades.

The dispute centres on Turkey's refusal to release USA pastor Andrew Brunson.

The lira's plunge and subsequent sell-off in Turkey is giving investors an unwelcome reminder of past crises in emerging markets, rattling nerves worldwide and leaving traders speculating on how bad contagion can get.

Argentina's currency fell 2.4 per cent to close at a record low 29.97 per dollar on Monday, as a local corruption scandal added to its woes, prompting the country's central bank to hike interest rates by 5 per centage points to 45 per cent.

"Turkey is faced with an economic siege", Erdogan said Monday, in the latest of a series of speeches.

CURRENCY: The dollar gained to 110.79 yen from Monday's 110.73 yen.

Years of a growth-at-all-costs policy bias have left Turkey's companies saddled with hundreds of billions of dollars in foreign debt, runaway inflation and one of the world's largest current-account deficits.

Analysts said most of the euro weakness was down to dollar strength but worries about the impact on European banks of the Turkish slump, despite the relatively limited exposure of most big lenders, had also played a role.


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