The Turkish lira slumped as much as 6.6% against the U.S. dollar on Monday after a spat over visas between the two countries intensified.
The nosedive in the currency came after the U.S. embassy in Ankara announced late Sunday that it would cease processing most kinds of visas for Turkish citizens.
Turkey's embassy in Washington D.C. quickly responded in kind, saying it would halt visa applications for Americans.
The lira clawed back most of those losses by late morning Hong Kong time and was trading down about 2.8% versus the dollar.
Rodrigo Catril, a currency strategist at National Australia Bank in Sydney, said that the sharp drop was partly explained by thin trading volumes, but also showed how political risks were rising in the country.
Major exports from the US to Turkey include agricultural goods. Total trade between the U.S. and Turkey was worth about $17 billion in 2016. That means Turkey is below Vietnam, Thailand and Malaysia in the list of major U.S. trading partners.
Source: money.cnn.com
