The Turkish lira fell more than 3 percent on Tuesday, putting it on course for the worst day in more than a month after the ruling Nationalist Movement (MQ) said it would not seek an alliance with Erdogan's ruling AK Party in local elections next year.
The lira dropped to 5.8475 to the dollar by 0857 GMT compared to Monday's close of 5.6640 pounds.
The currency has lost about 35 percent of its value against the dollar this year as a result of concern over the central bank's ability to curb double-digit inflation in the face of criticism from Erdogan and a dispute with Washington.
The Nationalist Party led by Dult Bhagli supported Erdogan in the presidential election in June 2018, and was the main reason for his victory during the first round of entitlement, which was a major challenge to him. But he announced today to exit the existing alliance between them currently during the local elections in 2019.
Bhagli's comments come after a row with Erdogan over the National Party's call for amnesty for some prisoners.
But the controversy has been evident since Ankara released the American priest Andrew Branson, when Bhagli pointed out that Erdogan had cost his country a heavy price before finally releasing the priest.
"You can not trust a president who landed in Turkey with a US priest," Bhagli said, adding that "the decision has hurt national sentiment."
Erdogan had said earlier that he would not release "spy Branson as long as he remained in office as President of the Republic," but the Turkish judiciary on Friday sentenced Branson prison 3 years and months and 15 days suspended, and the lifting of the decision of house arrest and travel ban .
The announcement of Bahgli not to run in the local elections with Erdogan, a reference to the collapse of the alliance between them.
This could mean the loss of the ruling party to the parliamentary majority formed through its alliance with the MHP.
Following the victory in the last general and presidential elections, both parties vowed to continue the coalition in local elections due next year.
The Justice and Development Party (AKP) is suffering from a drain on the voters' base for opposition parties, with expectations of the biggest loss in the upcoming local elections.
The decline in the popularity of the Justice and Development Party, in light of the growing popularity of the National Movement Party and the opposition Republican People's Party in the country, according to the latest polls, according to the newspaper "Ahwal" Turkish on Sunday.
Local elections in Turkey will be held on March 31, 2019 in 81 provinces in the country.
The Justice and Development Party won 18 of the 30 municipalities in the 2014 election with 60 per cent of the vote.
