Turkey and the US are now experiencing rocky relations following Washington's imposition of sanctions on two government ministers for not releasing American pastor Andrew Brunson, who faces terrorism-related charges in Turkey. In a telephone call on Friday, Finance Minister Berat Albayrak and his French counterpart Bruno Le Maire discussed US sanctions against Turkey and cooperation between their countries, Albayrak's ministry said.
Dashing hopes for a quick solution to the dispute, a Turkish court on Friday rejected an appeal for the evangelical pastor's release from house detention.
S&P said the downgrade of the debt rating to "B+" "reflects our expectation that the extreme volatility of the Turkish lira" which will undermine Turkey s economy.
Turkey's battered lira weakened 3 percent on Friday after a Turkish court rejected an American pastor's appeal for release, drawing a stiff rebuke from President Donald Trump, who said the United States would not take the detention "sitting down".
"Turkey has taken advantage of the United States for many years".
The US has already imposed sanctions on two Turkish government ministers and doubled tariffs on Turkish steel and aluminium imports.
Last Wednesday, in retaliation, Turkey increased tariffs on several US-origin products, including alcohol and tobacco products and cars.
An important emerging market, Turkey borders Iran, Iraq and Syria and has been mostly pro-Western for decades.
Meanwhile, Turkish President Recep Tayyip Erdogan has consolidated power over the central bank, and pushed for it to refrain from raising interest rates to support the currency, as experts say it should.
Erdogan said that Turkey would never bow before those "who set up their own order by exploiting the world". The feud over Brunson, who was detained in October 2016, has added to the jitters over an economy that grew quickly, with the help of heavy borrowing, in past years.
Despite the political tensions, the lira rebounded some 6 percent on Wednesday, strengthening to around 6.0 to the U.S. dollar. Turkey's dollar bonds fell, while the cost of insuring exposure to Turkish debt rose.
Erdogan has recently held talks with French President Emmanuel Macron and German Chancellor Angela Merkel.
Supporters of Brunson, who ran a small church in the Turkish coastal city of Izmir, say allegations that he was linked to Kurdish rebels as well as Turkish cleric and alleged coup plotter Fethullah Gulen are absurd. Erdogan has in turn slapped sanctions on US goods.
"Pastor Andrew Brunson is an innocent man held in Turkey & justice demands that he be released". Trump tweeted Thursday. He criticized Turkey for "holding our wonderful Christian Pastor".
According to the Middle East Eye, officials in Ankara are willing to concede to USA demands for the freedom of Andrew Brunson, an evangelical preacher accused of playing a role in the attempted coup there in 2016. He is facing terrorism and espionage related charges that US officials say are frivolous.
Turkey has repeatedly criticized the USA for not condemning the coup attempt two years ago.
If the evangelical pastor is found guilty, he will face up to 35 years in jail.