At the Ayakli borsa — or standing currency exchange — in old Istanbul, seasoned traders still ply their trade on their feet as they have for centuries. They say they have not seen such volatility and volume since 2001, when Turkey faced its last major currency crisis.

Those at Ayakli recently labelled August 10 as ‘Black Friday’ after a tweet by US President Donald Trump triggered a new round of tariffs on Turkish aluminium and steel and sent the lira reeling. From their vantage point at the standing exchange, the lira’s battle is far from over.

“As long as the tension with America continues to be high, as long as there are limited cash reserves here, the dollar is open to rise,” veteran currency trader Adnan Kapikaya said in the midst of the noisy calls to place orders.

Kapikaya is referring to the high-profile, Twitter-fuelled dual between Trump and Turkey’s long-serving leader Recep Tayyip Erdogan and the lira has been caught in the crossfire. Trump has turned up the heat seeking the release of American Pastor Andrew Brunson, who has been held in Turkey on espionage charges since 2016.

Due to heat he has put on Turkey, the US President has placed the country in the pole position for what is a nasty rush out of emerging market currencies and into the dollar as the US Federal Reserve winds down nearly a decade of historically low interest rates. During breakfast in a cafe in the central area, bank employee Mehtap Gunal said the near 40 per cent decline in the lira has been difficult to digest as prices for basic foodstuffs continue to rise.

“This has a shock impact on us. We feel it in our kitchens, cafés and on our salaries,” said Gunal. “To see our salary losing its value is scary.”

With a good instinct for the mood on the street, Turkey’s scrappy president has tried to counter-punch each of Trump’s moves. One day he threatened a boycott of US electronics, the next, doubling tariffs on a long list of American goods, from cars to cosmetics.

He also moved into a higher gear to shield Turks from the Trump offensive, by announcing emergency measures to limit Turkish companies from swapping liras for dollars. Erdogan also went out of his way to send a message to Washington that Turkey has friends.

Russia’s Foreign Minister Sergei Lavrov visited Ankara, followed a day later by the Emir of Qatar, Shaikh Tamim Bin Hamad Al Thani, who put forth a $15 billion (Dh55.1 billion) cash injection when Turkey needed it most. The all hands-on deck approach worked to slowdown panic selling of the lira, but Turkey’s long-term economic problems won’t vanish overnight after years of prolific spending.

In Taksim Square, a grand mosque taking final shape serves as an example of Erdogan’s construction-driven growth strategy during his 15 years in power.

The chief economist of Turkey’s powerful business association said local companies and banks are now suffocating under a mountain of foreign debt. After a rapid descent in the currency, the cost of repayment is soaring.

“Corporates and the financial sector — and if you include the government debt — they need to find $180 billion of funding for the next year and international reserves at the central bank stand around $100 billion. So, there is a gap and that is what investors have been focusing on,” said Zumrut Imamoglu, chief economist of Tusiad.

Imamoglu is forecasting a quick reversal of fortune from what she said was overheated 7.4 per cent rate of growth in the first quarter to near recession by the close of the year. She said Turkey’s current account deficit of 5.5 per cent, inflation of nearly 16 per cent and commercial lending rates of 38 per cent make up a toxic economic cocktail that will implode if Turkey does not turn to the International Monetary Fund for emergency lending, a move Erdogan remains steadfastly against.

Which means over the next year, the livelihood of the average Turk and their populist leader will remain closely linked to the tweets of the US President and a rising US dollar.

John Defterios is Emerging Markets Editor at CNNMoney.