Analysts say that while Washington's sanctions against Ankara sparked the immediate crisis, Turkey's economy has been risking trouble for a while due to high inflation and the weak lira.
The weakness of the Turkish currency has rippled through global markets, with its drop of as much as 18 percent on Friday hitting US and European stocks as investors fretted about banks' exposure to Turkey.
The Turkish currency pulled back slightly Monday morning from its overnight record low of 7.24 to the dollar as the market awaits the announcement on Monday of the government plan to rescue the beleaguered currency.
"We will respond to those, who declared trade war on the entire world and included Turkey in it, by steering towards new alliances, new markets", he said. "We are taking the necessary steps against these attacks and will continue to do so".
He has threatened to seek new alliances - a veiled hint at closer ties with Russian Federation - and warned of drastic measures if businesses withdraw foreign currency from banks.
Economists say he wants to keep the growth ticking and has thus made clear interest rates get in the way, with Erdogan describing them as the "mother and father of all evil".
Turkey's Foreign Minister Mevlut Cavusoglu speaks at the 10th Ambassadors' Conference in the capital Ankara.
Erdogan won a new mandate in the polls with enhanced powers.
German Chancellor Angela Merkel urged Turkey on Monday to ensure the independence of its central bank and allow it to make necessary changes to save its economy.
On Monday Turkey's central bank announced measures to help that country's banks manage their liquidity, but the lira and Turkey's stock market continued to slide anyway.
In times of high uncertainty, banks tend to shy away from lending to each other.
"It's another Manic Monday", said Jordan Rochester, a currency strategist at Nomura International in London.
The lira has now dropped some 45 percent this year.
Emerging market stocks lost 2.11 per cent.
U.S. oil production from seven major shale basins was expected to rise 93,000 bpd in September to 7.52 million bpd, the U.S. Energy Information Administration (EIA) said.
Investors are anxious about a confluence of factors including Turkey's reliance on foreign loans, which become more hard to repay when the country's currency is plunging.
Among the most important things investors are watching out for is whether Turkey, in an effort to stymie the outflow of capital from the country, puts limits on money flows.
Should private Turkish debtors, who owe around 75% of Turkey's external debt, fail to service their share as a result of the nosediving lira and creditors' unwillingness to lend any more hard currency, the European financial system might have to absorb significant losses. He said it had readied an "action plan", without elaborating.
Turkey and the United States, two North Atlantic Treaty Organisation allies, have been locked in bitter disputes over a string of issues from a pastor's detention on terror charges to the war in Syria. The freefall has been exacerbated by latest U.S. threat to double tariffs on Turkish steel and aluminum.
Relations between the countries soured after Trump threatened to impose sanctions on Turkey over terror-linked American Pastor Andrew Craig Brunson, who was arrested in the Aegean province of Izmir in December 2016.
Addressing a conference in Ankara gathering Turkish ambassadors, Mevlut Cavusolgu on Monday called on the United States to "remain loyal to ties based on traditional friendship and North Atlantic Treaty Organisation alliance" with Turkey.
The Interior Ministry launched an investigation into 346 social media accounts on grounds of "provocative sharings on social media", the state-run Anadolu news agency reported.
In contrast, the Turkish economy grew by 7.4 percent past year - quicker than financial growth champions China and India.