The Turkish lira tumbled to a new record low overnight following U.S. imposed sanctions relating to the trial of an American pastor accused of backing terrorism.
The new sanctions on Thursday were placed on two of President Tayyip Erdogan's ministers, with the U.S. saying they played a leading role in the arrest and detention of evangelical pastor Andrew Brunson.
He's charged with supporting a group blamed for an attempted coup in 2016. U.S. Secretary of State Mike Pompeo is expected to meet Turkey's top diplomat at the ASEAN summit Friday.
The lira hit an all-time low of $5.1125 versus the dollar shortly before midnight Thursday eastern time. Mildly better-than-expected Turkish inflation data released Friday morning provided brief respite and at around 8:00 a.m. ET the currency had risen back to $5.0700.
Inflation in the country has been rampant with consumer prices rising almost 16 percent in July alone. While the country's central bank has raised interest rates to support the currency and quell inflation, the Central Bank of Turkey unexpectedly held its benchmark interest rate at 17.75 percent on July 24. Erdogan has repeatedly insisted that rates should not be raised too high, triggering suggestions that the central bank doesn't act with full independence.