The Turkish lira dropped to a new low against the dollar, losing 4 per cent on Thursday despite government promises of a new economic plan, as pressure mounted on Ankara to reassure investors and resolve an escalating dispute with the US.

After a Turkish delegation to Washington failed to show progress towards the lifting of US sanctions, the currency fell to an all-time low of TL5.4941 against the dollar. It has lost 31 per cent since the start of the year, including a decline of 7.6 per cent in the past six trading days.

Ankara said Berat Albayrak, finance minister, would announce a “new economic model” on Friday and suggested that the government would seek to cool the economy to address investors’ concerns about unbalanced growth and excessive dependency on short-term funds from abroad.