Image copyright AFP Image caption A meeting in May between Donald Trump and Recep Tayyip Erdogan
The Turkish lira has fallen to a record low against the dollar after the government’s currency crackdown.
The currency has plummeted in value in the last five weeks, costing the economy $10.7bn, or 20% of GDP.
Meanwhile, the US has suspended a major arms deal with Turkey.
But what does this all mean for travellers?
WHAT IS THE INFLATIONARY TRADE SPREAD?
The lira exchange rate fluctuates based on the economic situation and the supply and demand of foreign currency.
It gained value to hit a record 7.24 against the dollar this week, but has fallen back over the last three days.
On Thursday the Turkish central bank devalued the Turkish lira, by 30%, in an attempt to stem the decline in the currency.
WHY HAS IT WENT DOWN?
The Turkish central bank said it was devaluing the currency in order to stabilise the local financial system.
But the central bank had no control over how the lira reacted to this announcement.
The government has recently introduced measures to fight the lira’s depreciation, including rate rises.
It has also tightened its control over the banks by shutting down shuttered accounts and appointing its own individuals to the boards of several banks.
WHY HAS THE US PAID IT FORCE WITH DRAMA?
The US has suspended a weapons sale to Turkey, and President Donald Trump has suspended the purchase of F-35 fighter jets.
But these sell-offs have been small by comparison to the crisis in the lira.
Critics in Turkey accuse the US of bullying tactics, damaging regional relations and denying access to the airspace of other countries.
President Recep Tayyip Erdogan has called for retaliation from other countries as a means of prompting the US to reverse its decision.
NEW RATES
The central bank has announced a massive increase in interest rates – from 12% to 24% – which is expected to boost the value of the lira.
But some economists fear it may prove to be an ineffective measure.
The Bank of Turkey said on Thursday the currency’s fall had not been caused by the central bank, but by a decline in the global market for foreign currency.