The Turkish lira has collapsed to an all-time record low against the dollar, but the country's leader has brushed aside concerns, telling Turks "we have our God."
The lira hit fell more than 12 percent in value to reach more than six lira to each dollar on Friday morning.
At around 5:00 ET, the currency had risen back to $5.911.As recently as April one dollar bought about four Turkish lira.
The latest bout of selling comes after a Turkish delegation returned from the United States with apparently no progress on the detention of a U.S. pastor.
The evangelist, Andrew Brunson, is charged with supporting a group blamed for an attempted coup in 2016.
President Donald Trump said in July that the U.S. would place "large sanctions" on the country for the pastor's detention.
Late Thursday, Turkish President Recep Erdogan said he will stand up to the pressure.
"There are various campaigns being carried out. Don't heed them," Erdogan said. "Don't forget, if they have their dollars, we have our people, our God.
We are working hard. Look at what we were 16 years ago and look at us now," Erdogan told supporters.
The Turkish president is reported to make his next public appearance in the eastern province of Bayburt on Friday.
The lira's three-month implied volatility gauge hit its highest since late 2008. Implied volatility shows the market's opinion of the currency's potential moves. If the implied volatility is high, the market things the currency has potential for large price swings in either direction.
European bank concern
The euro dropped 0.5 percent against the dollar on Friday morning, following reports that the European Central Bank (ECB) is concerned over the impact of a weak Turkish lira on European banks.
According to the Financial Times, the lira's depreciation could hurt European banks such as Spain's BBVA, Italy's UniCredit, and France's BNP Paribas in particular.
Speaking to CNBC's "Squawk Box Europe" Friday, Timothy Ash said the FT report was "sensationalist" as any losses incurred by the banks would be by local subsidiary branches who had invested using Turkish lira and not U.S. dollars.
He added however that while banks in Turkey remained in reasonable shape, the country did have a problem with its balance of payments that has occurred because the economy had been allowed to overheat.
"Ultimately now, there is zero credibility in the Central Bank of Turkey and zero credibility in Turkish policy making. Whatever they do, the market doesn't believe them," Ash said.
Turkey's economy is seen as particularly fragile due to its high level of debt that is priced in dollars.
The more the lira weakens, the more expensive that debt becomes.
The latest estimates from the International Monetary Fund (IMF) show that the total amount of Turkish debt payable in other currencies is more than 50 percent of the country's gross domestic product.
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 in the past to support the currency and quell inflation, the most recent meeting in July saw the Turkish central bank unexpectedly hold its benchmark interest rate at 17.75 percent.
Erdogan has repeatedly insisted that rates should not be raised too high, triggering suggestions that the central bank doesn't act with full independence.
Berat Albayrak, Turkey's finance minister, is set to reveal "a new economic model" later Friday.