While Turkey may have repatriated all of its gold held at the NY Fed, or at least moved it from New York to the BIS tower in Basel as wereported overnight, what markets are far more concerned about is the ongoing inactivity by the central bank to arrest the record collapse in the Turkish Lira and the just as record surge in Turkish 10Y yields, which in light of Erdogan’s threats on the “independent” central bank, which is now terrified to hike rates, is perhaps understandable.

It is therefore also understandable why, as Bloomberg reports this morning, one brokerage is looking for help from a higher power: “God help Turkey” Istanbul-based broker Alnus Yatirim said in the sign-off to its morning note to clients on Monday. “We’re faced with a central bank that is watching the market when it needs to lead and direct it.”

Yatirim has a point: on today’s Bloomberg EM Bloodbath chart, the TRY is once again the worst performing currency against the USD…

… as the Turkish Lira drops to a fresh all time low, just shy of 4.60 against the USD.

The brokerage predicted that the TRY could fall to 4.58 per dollar by the end of this week – or rather the start as it is already there now, give or take – and 4.75 next week.

The market is testing whether the central bank’s verbal interventions are a bluff or not, Alnus said. Without policy action, the damage is likely to spiral, it said, citing the $222 billion of net debt held by Turkish non-financial companies in overseas currencies. Each 1 cent depreciation in the currency adds about 5 billion liras to the cost of Turkey’s foreign borrowings, it said.

Adding to an already dire picture, overnight rumors emerged that the government will seize foreign currency deposits although Turkey’s banking regulator chief Mehmet Ali Akben said such speculation is “absurd,” Sabah newspaper reported. “Such a decision is neither discussed or a work has been done on it” he said noting that banks’ rollover ratio is around 110%, and adding that they have no problem in foreign borrowing (“for now” he forgot to add).

Although just as one Turkish official was about to sound somewhat credible, he added that similar speculations are being made before every election and accused credit rating agencies of trying to spread negative mood. He also said that the Turkish banking system is strong, although one look at today’s 10Y Turkish yield which just hit an all time high of 15%, may suggest otherwise.

The good news, at least for now, is that Turkish stocks haven’t followed the meltdown, with the Borsa Istanbul 100 Index down 0.3% in early trading, wiping out nearly half of last week’s gain, when investors poured $10.3MM into New York and London-traded Turkey stocks ETFs in the week ended May 18, the biggest weekly inflow since Oct. 13.

We doubt stocks will be spared for long, however, and the moment Erdogan starts speaking in the next 24 hours is when the real selling will begin even as Turkey inches ever closer to soaring, Venezuela-style inflation.