The Turkish lira struggled just below the 5 lira per dollar level after news media reported that the United States has prepared a list of sanctions against Turkey.

President Donald Trump threatened to impose sanctions after Turkey refused to release an American clergyman, Pastor Andrew Brunson, who was arrested last year on charges of terrorism and coup-plotting. Washington believes that Turkey is using Brunson as a hostage in order to force Washington to extradite Fethullah Gulen, who the Turkish government claims was responsible for the July 2016 coup attempt.

Turkish-lira

The lira traded at 4.9989, just below the psychologically important 5-lira mark, suggesting that Turkey’s central bank intervened heavily to prevent an even steeper fall in the currency.

A plunging currency makes it harder for Turkish companies to service their nearly $300 billion in foreign-currency loans.