Iran's President Hassan Rouhani, Russia's Vladimir Putin and Turkey's Recep Erdogan meet in Sochi, Russia. Photo: Sputnik / Mikhail Metzel via Reuters

The Turkish lira tumbled again today to 3.96 to the dollar, barely better than its intraday low of 3.98 on Nov 22. The US-traded Turkish equity ETF TUR has fallen from a Sept. 1 peak of $47.12 to just $37.30, down over 20%, and now in a bear market.

Media reports point to political problems with the United States over the upcoming trial of a top Turkish banker with close ties to the Erdogan regime. Mehmet Hakan Atilla, a top official of Halkbank, is accused of laundering hundreds of millions of dollars of Iranian money to evade international sanctions. Halkbank is down almost 8% today on the Istanbul stock exchange.

Also weighing on the Turkish currency is the country’s close relationship with Iran. The Sunni Gulf States have been a major source of funding to cover Turkey’s large current account deficit, and geopolitical strains are a possible reason for the Saudis and others to reduce Turkish exposure.