ISTANBUL – The Turkish lira continued on Monday the bearish path of recent days, following last week’s announcement by the credit rating agencies Moody’s and Standard & Poor’s (S&P) that they had downgraded Turkey’s sovereign credit rating.

According to market values, at 7:40 GMT one dollar was exchanged for 6.07 liras and one euro for 6.92 lira, declining 1.06 percent and 0.42 percent respectively compared to the values at Friday’s close (6.01 lira for one dollar and 6.90 lira for one euro).

The Turkish currency has fallen by around 25 percent in August, and the lira has lost more than 40 percent of its value year to date.

S&P’s rating downgrade on Friday from BB- to B+ signaled that buying Turkey’s sovereign debt is insecure and speculative, an evaluation similar to that of Moody’s, which also downgraded Turkey’s ratings from Ba2 to Ba3 and “changed its rating outlook to negative.”

Moody’s explained in a statement Friday that such “weakening is exemplified by heightened concerns over the independence of the central bank, and by the lack of a clear and credible plan to address the underlying causes of the recent financial distress, notwithstanding recent statements by the government.”

The lira’s fall comes amid escalating tensions in recent months between Turkey and the United States, with the two NATO allies imposing mutual tariffs.

Earlier this month, the US government imposed sanctions on steel and aluminum imports from Turkey, while Turkish President Recep Tayyip Erdogan has raised tariffs on some imported US goods and warned that his country may boycott electronic goods.

On Friday, a Turkish court rejected for a third time an appeal to release US pastor Andrew Brunson, currently under house arrest.