The lira has weakened faster than that of any fellow emerging market's this year except Argentina, as a failed coup — and the crackdown that's followed — spooked foreign investors, exacerbating the effects of the stronger dollar that's greeted the election of Donald Trump. 

After a 25 basis point rate hike to the central bank's overnight lending rate last month failed to prevent the rout, clamors for householders to risk their savings have grown. The odds are stacked against them. Turkish central bank data show that banks worldwide trade $17 billion liras every day; a volume which every adult in Turkey would have to change more than a daily $300 dollars to overpower.

Still, the efforts of those fighting the fallout have taken varied forms. While some businesses are rewarding those dumping dollars, farmers in the central Anatolian province of Aksaray staged a symbolic protest at one of the country's largest livestock markets on Wednesday, burning bills "in retaliation at the U.S. and Europe," according to Ihlas news agency. 

“Europe and America now want to realize economically the coup that they failed to carry out with tanks, rifles and F-16s on July 15,” Ihlas cited Hamit Ozkok, chairman of Aksaray Commerce Exchange, as saying. He was referring to the date of the failed putsch earlier this summer, in which hundreds lost their lives. While Erdogan blames a former political ally, Fethullah Gulen, for instigating the coup, the cleric resides in Pennsylvania, and Turkey has sparred with the U.S. about his extradition. Gulen has denied the allegations.

"I think there's a failure to appreciate that some of the rhetoric smacks of desperation," said Paul McNamara, a fund manager at GAM Ltd in London who oversees around $5 billion in assets. He said only a strong increase to central bank borrowing costs can halt the currency's declines.

Eoin Treacy's view

Local currency five-year bonds yield over 10% while US Dollar denominated bonds yield half that. Brazil’s local currency bonds have a higher yield while its US Dollar debt is lower. Both countries face challenges but Turkey is receiving more attention because it is much less politically stable. 

The problem for Turkey is that it marketed itself as the gateway to the Middle East at the beginning of the last decade and unfortunately that is indeed the case. Having a land border with Syria and Iraq, Turkey has a lot to deal with. Refugees flooding into the country and a failed coup which has further cemented Erdogan’s position are a major drag on investor sentiment. 

The Dollar broke emphatically out of a yearlong range in October and surged to an intraday peak today above TRY3.5. Despite Erdogan’s suggestion today that interest rates should be cut, the risk of central bank intervention to support the currency is looking increasingly likely. 

The UK listed, Pound denominated iShares MSCI Turkey ETF dropped from 2000p to 1500p over the last two months and is now testing its lower side of a five-year range amid a deep oversold condition.