Still, the sell-off may not be over after the government struck a defiant tone on Friday even after Trump's move.
Trump also declared, "Our relations with Turkey are not good at this time!" The U.S. recently hit two high-ranking Turkish officials with sanctions after the Turkish government refused to release imprisoned Christian pastor Andrew Brunson.
Pressure on Turkey is also coming from US Congress that moved late last month to block further F-35 deliveries to Turkey until it cancels the S-400 defence system deal with Russian Federation and Brunson is released.
ISTANBUL/ANKARA - President Tayyip Erdogan told Turks on Friday to exchange gold and dollars into lira, with the country's currency in free fall after President Donald Trump turned the screws on Ankara by doubling tariffs on metals imports.
The lira plunged as much as 14 per cent on Friday, as worries about Erdogan's influence over monetary policy and worsening USA relations snowballed into a market panic.
"This is a domestic and national struggle", Erdoğan said, according to The Associated Press.More news: Paul Pogba's season-opening penalty... with stuttering run-up
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The day saw the lira plunge as much as 18% at one point, the biggest one-day drop since Turkey's 2001 financial crisis.
President Donald Trump says the United States has chose to increase tariff rates on Turkish steel and aluminum.
Minutes before Ankara learned about the higher tariffs, the lira had already hit an all-time low of 6.87 against the dollar.
What's happening to Turkey's currency right now?"While they have dollars, we have our people, law and Allah", the Turkish leader said addressing citizens in the Black Sea city of Rize. But since adopting increased powers, Mr Erdogan appears to have greater control over the bank as well.
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.
"The Turkish Lira is in a state of crisis, as a result of investor confidence in Turkish assets remaining at alarmingly low levels", said Jameel Ahmad, Global Head of Currency Strategy & Market Research at FXTM. Inflation increased 16 percent in July, and Erdogan has insisted that interest rates not increase.
That indicates that people are buying dollars and euros, not selling them off - and that they're not finding buyers in lira, anyway. The tech-heavy Nasdaq composite was down 83 points, or 1.1%, poised to end an eight-day winning streak.