It was already an ugly day for the Turkish Lira, which earlier in the day accelerated its drop for the 4th consecutive session, sending the USDTRY to the highest level since August 14 when the currency crashed over the weekend to the lowest level on record.

Today’s drop was initially precipitated after Erdogan said on Thursday that Turkey “is not without alternatives” and warning that it won’t “back down over threats.”

In his latest attack on the US, Erdogan said that “some do not hesitate openly stating the fact that they are trying to drive us into a corner through the economy. There are surely structural issues in the Turkish economy. We know these issues and are working to fix them.”

Alas, as we noted earlier, judging by the plunge in the lira, the market did not seem convinced by Erdogan’s latest rant, and proceeded to slide further after closing last night down 3.0% at 6.469 which was weaker than where it was on the Friday 3 weeks ago (6.4323) when the panic spread across the market. The only softer closing level was on the following Monday (6.884) but that actually included a big intra-day rally back from the Asian wides. Yesterday was the third day in a row the Lira has weakened (post domestic holidays) while Turkey’s 5yr CDS was also +14.4bps wider and touched 500bps again (recent high was 535.0 on Aug 13).

Meanwhile, the latest attempts by Turkish authorities to shore up the lira in mid-August that led to a three-day rally in the aftermath, now seem to be losing potency now. And the most recent effort, yesterday’s reintroduction of borrowing limits for banks yesterday – an unwind of what took place just two weeks ago – is proving ineffective.

Then, pouring gas on the fire, the Turkish currency plunged even more, following a Reuters headline that the Turkish central bank deputy Klimici had resigned, and was set to join the Turkish Development Bank. From Reuters:

Turkish central bank’s deputy governor and Monetary Policy Committee member Erkan Kilimci is set to resign from the bank, two sources familiar with the matter told Reuters.

Kilimci is to become a board member for the Development Bank of Turkey, the sources said. No one was immediately available at either bank for comment on Thursday, a public holiday in Turkey.

Turkey’s Central Bank has been under pressure from President Tayyip Erdogan not to increase interest rates, despite the lira’s depreciation against the U.S. dollar by more than 40 percent this year.