It's no longer a crisis confined to Turkey - the falling lira has hit Asian stocks and European ones.

Euro zone bank stocks tumbled 1.2 percent to a six-week low with Turkey-exposed lenders BBVA , Unicredit and BNP Paribas taking a hit.

The MSCI world equity index was down half a percent during Europe's morning The euro also fell to its lowest against the dollar since July 2017. (SOUNDBITE) (English) MIKE INGRAM, SENIOR MARKET STRATEGIST, WH IRELAND, SAYING: "Mainland Europe is not a very dynamic growth market for European banks.

They've gone looking elsewhere and to some extent in emerging markets.

Turkey has been an avid consumer of loans, so yeah they've been caught with their hands in the cookie jar yet again." Promises from Turkey's central bank eased pressure on the lira - it had fallen 12 percent - but not before the Argentine peso and South African rand were caught in the crossfire, The rand fell 10 percent at one point before recovering two thirds of the losses.

Turkey's location - between Europe, Asia and Russia - doesn't help.

Neither does it's importance to NATO. (SOUNDBITE) (English) MIKE INGRAM, SENIOR MARKET STRATEGIST, WH IRELAND, SAYING: "President Erdogan suggested over the weekend that if the U.S. persists with sanctions and tariffs that it might seek alliances elsewhere and we know that Erdogan and the Russian President Vladimir Putin spoke over the weekend so I think that's probably what's troubling investors." Erdogan has dismissed the lira's freefall as a plot by the U.S.

But either way at current levels it will add 4 - 5 percentage points to headline inflation in coming months, pushing it up to 21 percent in September.

And further falls can't be ruled out.