PRESSURE continues to mount on Turkish President Recep Tayyip Erdogan who vowed to fight an “economic war” as the lira plummeted to record lows over the weekend.

He maintained a defiant tone at a series of rallies on Saturday, telling supporters in his Black Sea heartlands that he had paid off billions in IMF loans and urging them to have confidence in an economic recovery despite a 14 per cent drop against the dollar.

“That means we can do it, that we will get up from the place where we have fallen,” he said to the thousands gathered.

Mr Erdogan repeated his call for citizens to convert their dollars and gold into Turkish lira, with his son-in-law Berat Albayrak — Turkey’s finance minister — speaking of a “new economic model” for the country in an address on Friday.

Mr Erdogan has sought to blame sanctions on two leading government ministers and the doubling of tariffs on steel and aluminium by US President Donald Trump for the currency crisis.

Foreign Ministry spokesman Hami Aksoy has complained that US sanctions violate World Trade Organisation rules.

“The United States should be aware that it will not achieve anything with such sanctions and pressure, but will only harm our alliance, which is already being rigorously tested,” he said.

“Turkey will respond to all measures taken against it reciprocally.”

But Turkey’s economy was performing poorly long before the US actions, with many claiming that Mr Erdogan called the snap elections in anticipation of a looming national recession.

The bullish authoritarian has built a carefully crafted image of a strongman leader who has stabilised the economy. 

His ruling Justice and Development Party (AKP) came to power in 2003 as conservative Islamic business and a rising bourgeoisie enabled him to usher in neoliberal reforms.

Initial signs were good, with a 7 per cent growth rate between 2002 and 2007 when the lira appeared to stabilise. However structural reforms and an IMF loan of $45.8 billion were not enough to stop a significant reduction in economic growth over the next period.

The currency crisis leaves Turkey facing difficulty in reducing its national deficit and investors appear to be nervous about Mr Erdogan’s running of the economy and tight control over the country’s central bank.

The lira has lost more than 40 per cent of its value this year, making it one of the world’s most unstable currencies.