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ANKARA, Aug. 7 (Xinhua) -- The Turkish currency plunged to a record low on Monday adding new concerns for the struggling economy amid unprecedented diplomatic spat with the United States.

The Turkish lira, which has lost 27 percent of its value this year, fell some 6 percent to a record low of 5.42 against the dollar, its biggest single-day drop in the last 10 years.

The lira rebounded to 5.20 against the dollar Tuesday morning but still fluctuating after reports that a Turkish delegation will soon go to Washington for talks aiming to resolve the row between the two NATO allies.

Ankara and Washington has reached pre-agreements on certain issues, without giving details, said private broadcaster CNNTurk, citing diplomatic sources.

A source close to the Turkish government said to Xinhua that "Turkey wants tensions defused with the United States and is working intensively on this issue," without elaborating nor commenting on reports of a Turkish delegation going to Washington.

Last week, after a week of threats, U.S. President Donald Trump's administration imposed extraordinary sanctions on two Turkish ministers over the ongoing detention of U.S. pastor Andrew Brunson, who was accused of espionage and terrorism by the Turkish judiciary, relating to a failed military coup in 2016.

Turkish President Recep Tayyip Erdogan said on Saturday that Turkey would retaliate by freezing assets of two American ministers to respond to a "disrespectful" and "unacceptable" U.S. decision to sanction his senior ministers.

Over the weekend the U.S. Trade Representative said it was reviewing Turkey's duty-free access to the U.S. market, after Ankara imposed retaliatory tariffs on U.S. goods in response to American tariffs on steel and aluminum, causing the lira to plummet anew.

The latest U.S. move could affect 1.7 billion U.S. dollars of Turkish exports.

The earlier sell-off on Monday prompted the central bank to step in and loosen the upper limit of banks' reserve requirements. However, the move did little to prop up the lira, which also hit a record low versus the euro, analysts said.

Relations between the NATO allies have steadily worsened in recent years, strained by serious differences on Syria policy and Brunson's trial.

Experts think that there is no easy way to restore deteriorating ties and that efforts in this direction will take time.

Turkey has one of the biggest piles of foreign-denominated debt in the developing world, much of which comes due in the next year and the decline of the currency makes it more expensive to pay off. Thus fresh external funds are crucial for its economy.

The row with the United States had added to concerns about economic and monetary policy in Turkey after the re-election of Erdogan for a new term with strengthened powers on June 24.

Erdogan has repeatedly urged the central bank to lower rates to boost growth, baffling markets.

Last week, Erdogan announced an ambitious 100-day action plan to boost economy by spending billions of dollars on mainly infrastructure, building and energy projects while resources are scarce. He also called on Turks to convert their dollars, euros and gold into lira to face an "economic war."聽