Turkey’s battered lira weakened 5% on Friday after a Turkish court rejected an appeal by U.S. pastor for release, a day after the United States warned of further sanctions unless Ankara hands over the detained minister.

The Turkish lira weakened to 5.86 against the dollar on Friday from its previous close of 5.8150 as investors weighed up a U.S warning.

The lira has weakened 35 percent against the dollar this year as the deterioration in ties between the NATO allies fuelled losses driven by concerns over President Tayyip Erdogan’s influence over monetary policy.

 The currency has lost nearly 40% of its value against the dollar this year, hit by Ankara’s worsening rift with Washington and investor alarm about President Tayyip Erdogan’s influence over monetary policy. Erdogan, a self-described “enemy of interest rates”, wants to lower borrowing costs despite high inflation.

The lira crisis has deepened concerns about the broader economy – particularly Turkey’s dependence on energy imports and whether foreign-currency debt levels pose a risk to the banking sector.

 At 1256 GMT the currency stood at 6.1050 to the dollar, 5 percent weaker. Earlier in the session it fell as much as 7%.

A court in the western province of Izmir rejected an appeal to release the pastor, Andrew Brunson, from house arrest, saying evidence was still being collected and he posed a potential flight risk, according to a copy of the court ruling seen by Reuters.

Brunson, from North Carolina, is under house arrest as his trial on terrorism charges continues. He has denied the charges, and his case has been taken up by U.S. President Donald Trump, who counts evangelical Christians among his core supporters.

Turkish sovereign dollar bonds fell, while the cost of insuring exposure to Turkish debt rose.

The Turkish banking watchdog has taken steps to stabilise the currency, limiting futures transactions for offshore investors and lowering limits on swap transactions. But some economists have called for more decisive moves.

Turkey and its firms face repayments of nearly $3.8 billion on foreign currency bonds in October, Societe General has calculated. For companies, the cost of servicing foreign debt has risen by a quarter in lira terms in the past two months.