The troubled currency collapsed 12 percent at one point on concerns about tensions with the United States linked to Ankara’s detention of an American pastor as well as economic uncertainty.

The losses Friday extended the previous day’s sell-off as high-level talks seeking to slacken tensions with the United States produced no apparent breakthrough.

The stand-off has led both sides to slap sanctions on senior officials with concerns of graver measures to come.

At the same time, the Turkish economy under President Recep Tayyip Erdogan is showing signs of overheating, with the country running a large current account deficit that makes it heavily dependent on foreign capital inflows.

“The backdrop to endemic lira weakness is of course the familiar one of an economy suffering rising inflation and a burgeoning balance of payments crisis alongside a central bank that has in effect been stripped of much of its independence since Erdogan was re-elected ... in June,” Ray Attrill, head of forex strategy at National Australia Bank, said in a note.

Concerns were intensified Friday by a report in the Financial Times that the supervisory wing of the European Central Bank had over the last week begun to look more closely at eurozone lenders’ exposure to Turkey.