LONDON (Reuters) – A plunge in the Turkish lira rocked global equities and emerging markets on Friday, and fears of more turmoil sent investors scurrying for safety in assets like the yen and U.S. government bonds.

The lira fell as much as 14 percent against the dollar, chalking up its worst day since Turkey’s financial crisis of 2001. It came on the back of a deepening rift with the United States, worries about its own economy and lack of action from policymakers.

The currency is now down more than 36 percent this year, and 17 percent this month alone, fanning worries about a full-blown economic crisis.

“It is hard to pinpoint the point of no return (for Turkey and the lira)” said Tilmann Kolb in the Chief Investment Office at UBS Wealth Management.

Bank shares across the continent fell and the euro slipped to its lowest since July 2017 as the Financial Times quoted sources as saying that the European Central Bank was concerned about European lenders’ exposure to Turkey.

Shares in France’s BNP Paribas, Italy’s UniCredit and Spain’s BBVA, the banks seen as most exposed to Turkey, fell as much as 4 percent.

That took euro zone bank shares down 1.3 percent while the pan-European STOXX 600 index fell 0.7 percent. [.EU]

“People looking at things this morning are much more aware that there is central (major) contagion risk,” said David Owen, chief European economist at Jeffries in London.

“Having said that, what’s happening in emerging markets is leading to risk-free rates being bid for and that includes Treasuries, Bunds and gilts.”

Emerging market currencies slide: tmsnrt.rs/2vzelu5

The MSCI All-Country World index, which tracks shares in 47 countries, was also down 0.6 percent on the day, having erased all its gains for the week. Wall Street was set for a weak open.

As investors piled into “safe” bonds, German yields hit three-week lows and yields on U.S. 10-year Treasuries fell to 2.8913 percent.

Investors are now awaiting the release of U.S. consumer price inflation data for July for clues on the interest rate outlook and to gauge if new import tariffs were starting to have an impact. The data is expected to show inflation increased 0.2 percent, after rising 0.1 percent in June.

The Australian dollar, often viewed as a gauge of global risk appetite due to its reliance on commodities, was the biggest faller among developed currencies, down 1 percent on the day. Going in the opposite direction was the safe-haven Japanese yen, which hit a one-month high against the dollar.

The dollar index, which measures the greenback’s strength against a group of six major currencies, breached 96, taking it to its highest level since July 2017.

Adding to emerging market currency woes was the Russian rouble, which weakened to 67.12 to the dollar. Overnight it had retreated to its lowest since November 2016 on threats of new U.S. sanctions, weakening beyond the psychologically important 65-per-dollar threshold.

“Other EM currencies have held their ground against the dollar, having generally been weakening previously,” said analysts at Capital Economics.

“In most cases though, we suspect that this resilience will prove temporary,” they said, highlighting expectations of rising U.S. interest rates and worries over growing U.S. protectionism.

In commodities, U.S. crude oil rose 0.25 percent to $66.99 a barrel, while Brent crude was 0.4 percent stronger at $73.33 per barrel.

Despite the widespread flight to safe-haven assets, spot gold fell 0.2 percent to $1,210 per ounce.