Turkey’s lira slumped against the dollar, falling for the first time in four days, as the prospect of renewed conflict with U.S. keeps markets on edge.

With Turkish markets closed next week for a public holiday, some traders are bracing for turbulence amid thin liquidity. Retail investors are also buying dollars, according to an Istanbul-based trader who declined to be named as he is not authorized to speak to the media. The threat by the U.S. to impose more sanctions on Turkey if American pastor Andrew Brunson is not freed added to the skittishness.

“Markets have been waiting for a more credible/permanent response from the central bank before the holidays, and it seems like time is running out,” said Henrik Gullberg, a strategist at Nomura International Plc. in London.

The lira rebounded from a record low against the dollar on Monday as authorities moved to push borrowing costs higher by tightening liquidity and as banking regulators put a cap on lira swap agreements to deter short sellers.

Still, many investors say that’s not enough to anchor the currency against double-digit inflation. SEB’s Per Hammarlund said the lira sell will resume in the absence of “a major shift in economic policy making” and the currency could reach 8 per dollar this year.

The lira weakened as much as 6 per cent against the dollar to 6.2319, trimming this week’s gain to less than per cent.