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The Turkish lira slid to its weakest level in almost two months on speculation Turkey was headed for a fresh spat with the U.S.

The currency depreciated 0.7 percent to 5.85 per dollar by 5:25 p.m. in Istanbul after President Recep Tayyip Erdoğan threatened to close two critical NATO bases, Bloomberg reported on Dec. 16.

He said on Dec. 15 that would be an option if Washington sanctioned Ankara for buying a Russian missile-defense system.

The two have been at odds over Turkey’s purchase of the S-400 system earlier this year. NATO says it is incompatible with Ankara’s membership of the bloc, and the U.S. Senate Foreign Relations Committee has voted to impose sanctions that could plunge Turkey into renewed economic turmoil.

With inflation accelerating, Turkey’s real yields may not provide much of a buffer if appetite for the nation’s assets sours. The lira has already weakened more than any other emerging-market currency since Dec. 12, when the central bank cut rates a for a fourth straight meeting to 12 percent, bringing the total reduction since early July to 1,200 basis points.

Government bonds also fell, with the yield on 10-year local-currency notes jumping 16 basis points to 12.52 percent. The benchmark stock gauge advanced for a third day, led by Akbank TAS — one of the country’s largest listed lenders — as risk appetite across global markets remained buoyant.