But now the U.S. Federal Reserve is raising rates.
On Tuesday the lira recovered some ground, trading at 6.53 to the dollar at 0918 GMT, up around five percent on the day. Erdogan has accumulated more and more control over Turkey's financial system and does not want the central bank to raise interest rates - though independent economists say that's needed to support the currency.
Financial markets have taken fright at inflation, rising at an annual rate of more than 15%, and have been selling the Turkish lira, which is down by 45% against the U.S. dollar since the start of the year.
Erdogan has not backed down over the rift with the United States and has used the ensuing crisis to his advantage by blaming it on a foreign conspiracy, telling party members in the city of Trabzon on Sunday: "The aim of the operation is to make Turkey surrender in all areas from finance to politics".
After the US imposed sanctions on two Turkish ministers and amid growing domestic pressure from businesses and banks to contain a currency crisis, Erdogan said he wouldn't back down in the face of the economic attack against his country.
In a bid to get the pastor back on USA soil, Washington initially attempted to cut a deal with Turkey, with the Trump administration "dissuading Congress from immediate sanctions, and the Justice Department deciding not to press charges against 11 of the 15 of Mr Erdogan's bodyguards, who were filmed beating up protesters in Washington DC last year", according to The Daily Telegraph.
"We will boycott United States electronic goods", Erdogan said in a speech in Ankara, again showing no sign of compromise in the dispute. In Frankfurt on Monday, investors fled shares in German chemicals and pharmaceuticals giant Bayer, fearing a massive damages ruling against one of newly-acquired U.S. firm Monsanto's flagship products could signal a wave of costly lawsuits.
He has dismissed any suggestions that Turkey might intervene in dollar-denominated bank accounts, saying any seizure or conversion of those deposits into lira was out of the question. Following the meeting, Bolton gave no indication that the standoff between Turkey and the United States will terminate unless the detained American pastor, Andrew Brunson, is freed.
They also called for a boycott of American brands.
"I think the investor call Albayrak has scheduled has helped lira firm", said TEB Investment strategist Isik Okte.
India's government urged people not to panic on Tuesday after the rupee slid to an all-time low against the dollar. Mr Brunson, who faces up to 35 years in jail if found guilty, denies the charges.
A bigger danger is that Turkey's crisis will spill over into other emerging market economies and there were signs on Monday that other countries seen as vulnerable were coming under speculative attack.