A financial shockwave ripped through Turkey on Friday as its currency nosedived on concerns about its economic policies and a dispute with the USA, which President Donald Trump stoked further with a promise to double tariffs on the North Atlantic Treaty Organisation ally.
Turkish President Recep Tayyip Erdogan on Saturday rejected "threatening language" of the USA administration.
Despite Trump's insistence, Turkey has not budged in freeing American pastor Andrew Brunson, who has been detained by Turkey for nearly two years on charges that he was working with a terrorist organization and was a spy.
In the New York Times, Erdogan warned Washington not to risk its relations with Ankara, saying it would look for "new friends and allies". "The tweet is mightier than the Turkish sword", Cristian Maggio, head of emerging markets strategy at TD Securities, said in a note to clients, with reference to Trump's comments.
The lira's fall has been made worse by President Recep Tayyip Erdogan's statements on economic policy.
"Those who have dollars, euros or gold under their pillows should go and exchange them into [Turkish] lira".
Erdogan has downplayed the currency crisis, urging Turks to convert any stashed-away gold or foreign currency into lira, thereby waging a "war of independence" against America.
The lira has now lost over a third of its value against both the dollar and the euro this year, with the currency battered by both concerns over domestic economic policy and the political situation.
The lira, which has lost a third of its value this year, fell on his comments and was trading at around 6.05 to the dollar after he spoke, almost 9 percent weaker on the day.
The latest escalation came as Turkey's Economy Minister Berat Albayrak, who is Erdogan's son-in-law and a trusted lieutenant, unveiled what was touted as a new economic plan, pledging Central Bank independence, tighter budget discipline and sustainable and healthy growth.
In addition to the Brunson case, Washington is seeking the release of three locally employed US embassy staff.
"Don't forget, if they have their dollars, we have our people, our God", he said.
Q: Why is Turkey's currency so weak?
At the U.N. General Assembly past year, Trump called Erdogan a "friend" who got "very high marks" for how he runs the country.
"Aluminum will now be 20 percent and Steel 50 percent".
Turkey is a major emerging market economy with $466 billion in foreign debt (about 78 percent in USA dollars and about 18 percent in euros), or 52.9 percent of gross domestic product.
The central bank raised interest rates to support the lira in an emergency move in May, but it did not tighten at its last meeting.
Trump and Secretary of State Mike Pompeo have repeatedly called for his release, while Erdogan has said the USA should respect Turkey's judicial process.
Although Erdogan struck a defiant tone, his foreign ministry called for diplomacy and dialogue to solve problems with Washington and Trade Minister Ruhsar Pekcan said "we implore President Trump to return to the negotiating table".
Without naming any country, Erdogan said that those - who stand against Turkey for the sake of small calculations - would pay the price.
An important emerging market, Turkey borders Iran, Iraq and Syria and has been mostly pro-Western for decades.
"This could be the most expensive pastor in world history", Sekulow said, referring to the harm being done to Turkey's economy.
In Rize, Erdogan said the U.S. would pay a price by challenging Turkey for the sake of "petty calculations", denouncing Washington for declaring "economic war on the entire world" and holding countries "for ransom through sanction threats". As the currency drops, Turkish companies and households with debt in foreign currencies see their debts expand.