Turkey's central bank has insisted it will take "all necessary measures" to ensure financial stability, amid a currency crisis in the country.

The Turkish lira plummeted by almost 10% in early trading today, and its value has now halved over the past year.

On Friday, the currency plunged 18% - the biggest one-day drop for the Turkish currency since a 2001 financial crisis.

That drop coincided with Donald Trump's announcement of a doubling of tariffs on steel and aluminium imported from Turkey - with the US President stating that relations between the two countries are 'not good'.

Among other issues, the US and Turkish governments have been in a tense dispute over the decision by Turkish authorities to hold a US evangelical pastor named Andrew Brunson on terror charges.

Turkey, meanwhile, has demanded that the US extradites a cleric - Fethullah Gulen - who the government has accused of being behind a coup attempt in 2016.

Amid the uncertainty, economic markets in Europe have been bracing themselves over fears of a financial crisis in Turkey.

Fears of a contagion effect are sparking panic within the EU, as experts say the weak currency will impact the country's ability to pay creditors.

Today, Turkey's financial regulator announced a range of measures to 'sustain the effective functioning of markets'.

The central bank said it will "provide all the liquidity the banks need".

It said in a statement: "The Central Bank will closely monitor the market depth and price formations, and take all necessary measures to maintain financial stability, if deemed necessary."

Over the weekend, Turkish President Recep Tayyip Erdogan was defiant - suggesting the currency crash arose from a "political plot" against the country.

A presidential spokesperson, meanwhile, insisted the economy was strong and urged people to not pay attention to "speculative news and moves".