Concerns about the financial capacity of Turkey to withstand the economic impact of the coronavirus helped send the lira on Tuesday to the lowest level since a currency crisis in the summer of 2018.

President Recep Tayyip Erdoğan will convene a meeting of ministers and senior officials on Wednesday to discuss additional steps to combat the impact of the virus, which is threatening to ravage much-needed tourism revenues and send exports into a tailspin. The central bank cut interest rates at an emergency meeting on Tuesday, pledging to provide as much liquidity to banks as needed.

The panic created by rising cases of the virus in Turkey and elsewhere means Turkish authorities could need a war chest of tens of billions of dollars to offset a possible run on the lira and save many businesses from collapse. Just a few days ago, the lion’s share of Turkey’s foreign currency income came from European visitors and sales of goods to Germany and elsewhere on the continent. But no more.

The lira was down 1 percent at 6.49 per dollar on Tuesday afternoon local time in volatile trading, dropping in line with other emerging market currencies. The main BIST 100 index fell 4.3 percent to 84,101 points. Turkey now has 47 cases of the virus, the Health Ministry announced late on Monday.

Erdoğan may announce tax relief for businesses and approve delays to debt repayments for embattled firms on Wednesday, particularly those in the export and tourism industries, Reuters reported, citing two unidentified people with knowledge of the plans.

The measures could provide only brief relief, largely due to a slump in confidence in the government’s management of the economy. Turkey has spent heavily over the past year as Erdoğan sought to reverse an economic slump caused by the currency crisis.

The budget deficit has widened markedly and state-run banks approved slews of loans to businesses and consumers at below market rates. Furthermore, the central bank has slashed interest rates to below the rate of inflation and depleted its net foreign currency reserves in the lira’s defence, leaving the currency exposed.

Turks have rejected the lira and amassed tens of billions of dollars in their bank accounts over the past 18 months. During the height of the currency crisis, Erdoğan was adamant that Turkey would not apply to the International Monetary Fund for emergency loan relief, saying the country had the resources to stand on its own two feet.

That political independence has come at a significant financial cost. While crisis-hit Argentina went to the IMF cap in hand for $50 billion in the summer of 2018 and started putting it to use under strict supervision, the Turkish government has spent nigh on 100 billion liras in central bank profits and emergency reserves to prop up the economy.

The last of those reserves were handed over in January. Turkey posted a budget surplus of 21.5 billion liras that month after the central bank paid out its 2019 profits to the government early. On Monday, the Treasury and Finance Ministry reported a budget deficit of 7.4 billion liras as spending climbed at a faster pace than inflation.

The central bank, pledging on Tuesday to provide unlimited liquidity via the money markets, has slashed interest rates to 9.75 percent from 24 percent last July, when Erdoğan sacked and replaced its governor for failing to cut borrowing costs and support his government’s economic stimulus. The rate cuts included a 1 percentage point reduction at the emergency meeting. Inflation stands at 12.4 percent, meaning the lira is providing scant or negative returns to investors and deposit holders, denting confidence further and causing Turks to dollarise.

Misguided economic policies in Turkey, implemented at Erdoğan’s behest by his son-in-law, Treasury and Finance Minister Berat Albayrak, mean confidence among investors and ordinary Turks in his management of the economy is now at the lowest level since his governing party came to power in 2002.

Michael Rubin, a scholar for the American Enterprise Institute, said on Monday that Erdoğan’s dream of making Turkey one of the world’s top 10 economies by the country’s centenary in 2023 now lay in tatters. Turkey would be lucky to remain in the top 20 due to a combination of corruption, nepotism and economic mismanagement, he said.

But 2023 is a long way off. Turkey’s economy and the country at large, like many others, is only just starting to feel the impact of the coronavirus, both in terms of health and financial cost.

“Our country needs foreign currency. Tourism is wiped out. Exports are stuttering,” Murat Muratoğlu, a columnist for Sözcü newspaper, one of Turkey’s last remaining opposition newspapers, said on Tuesday.

Over the past few days, political leaders across Europe, such as French President Emmanuel Macron and German Chancellor Angela Merkel, announced financial aid packages worth hundreds of billions of euros each to help crisis-hit firms.

Largely spent out and rejecting the IMF, what does Erdoğan have to offer Turkey’s economy in comparison? Not much it seems, except printing more and more increasingly cheap lira.

(This column was updated to add details of the central bank's emergency rates decision)