As investors piled into "safe" bonds, German yields hit three-week lows and yields on US 10-year Treasuries fell to 2.8913 percent.
The lira went into free-fall, sinking more than 12 percent at one point to reach and all-time low, having now lost more than one third of its value this year against the United States dollar and the euro.
That is spreading fear of an impact on other economies and markets - bank shares across the continent fell and the euro slipped to its lowest since July 2017 as the Financial Times quoted sources as saying the European Central Bank was concerned about European banks' exposure to Turkey.
Meanwhile, markets are deeply concerned over the direction of economic policy under President Recep Tayyip Erdogan with inflation almost 16 per cent but the central bank reluctant to raise rates in response.
The standoff has triggered a selloff in the lira amid investor concerns about the direction of the country.
The currency is now down more than 36 percent this year, and 17 percent this month alone, fanning worries about a full-blown economic crisis.
"There are several campaigns being carried out [against Turkey]. Don't heed them", Erdogan said.
Brad Pitt: I've given Angelina Jolie $9m since split
Another source added: 'Brad has completely lived up to his commitments as far as child support and will continue to do so'. Custody issues have proved to be the biggest stumbling block in legally ending the Jolie-Pitt marriage.
He said: "If they have their dollar, we have the people, we have Allah". We are working hard.
"We are entering into a balance-of-payment crisis here", said Cristian Maggio, head of emerging market strategy at TD Securities in London.
Berat Albayrak, the Treasury minister and Mr Erdogan's son-in-law, is due to announce a "new economic model" for Turkey... He has presented an economic action plan for the next 100 days.
"Know this: We are better than yesterday, we will be even better tomorrow". Though this is four times larger than Greece, it is still "less than half the size of the Italian economy, despite Turkey's larger population of around 80 million versus around 60 million for Italy", according to the analysis.
In fact, TRY once again drops below the 6.0 mark after Erdogan said the country faces a wave of artificial financial instability.
"Many of these European banks have their own non-performing loans and liquidity issues to deal with themselves". "This is one of the most important principles of the free market economy - if you lend money, you take a risk and must accept the losses".
- See Baker Mayfield’s first touchdown pass with Browns
- Melania Trump’s parents sworn in as USA citizens
- 'Lock your doors': At least four dead in Canada shooting
- Showtime chief says risk paid off with Sacha Baron Cohen TV show
- Ohio State Opens Practice But Keeps Coaches, Players Away
- God of War New Game+ Arrives in August 2018
- How to watch the PGA Championship on Eleven Sports
- Jose Mourinho working on £89m Milinkovic-Savic deal
- College basketball coach threw punch killing NYC tourist
- Leaked recording: Nunes says Rosenstein impeachment would delay Supreme Court pick