The geopolitical turmoil in Turkey gave no reprieve to its local currency in the opening session as the Turkish lira continued its freefall, hitting an all-time low of 7.24 versus the U.S. dollar. The Turkish central bank attempted to ameliorate the falling currency with more liquidity by lowering the reserve requirement for banks by 250 basis points.

Last Friday’s collapse of the Turkish lira by 20% against the dollar continued over to begin this week’s trading session in the U.S. The currency took a nosedive when U.S. President Donald Trump said he would double tariffs on steel and aluminum.

Related: Plunging Lira Stokes Unusual Options Activity in Turkey ETF

Additionally, the lira is facing ongoing pressure with geopolitical tensions between the U.S. and Turkey heightening after negotiations over the detention of a U.S. pastor in Turkey took more steps backward than forward.

“The decline in the lira is multifaceted, caused not only by a weak external position in terms of current account deficit and inadequate currency reserves, but also the challenging political environment which exacerbates the vulnerabilities in the lira,” said Kerry Craig, global market strategist at J.P. Morgan Asset Management. “A mid-meeting rate hike and tightening of monetary policy may help to avert the lira’s decline, to some extent.”

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