Kayhan Oze/AP

Fitch Ratings downgraded Turkey's sovereign debt to junk status Friday—the latest blow for an economy which was once a bright spot of the emerging world.

The strain of the Syrian civil war, and a government crackdown following last year's coup attempt, has sent the economy into a downward spiral. As the Turkish Lira depreciates against the dollar, more and more firms—many of whom have borrowed in U.S. currency—cannot make their debt payments, risking a financial crisis. This latest news will only make lenders more wary of lending to the country.

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Data: Money.net; Chart: Andrew Witherspoon / Axios

Why it matters: Turkey was traditionally one of America's most stalwart allies in the Middle East, but the relationship has frayed due to disagreements on how to bring an end to the civil war in Turkey, and over Turkish President Recep Tayyip Erdogan's increasing authoritarianism . A financial crisis can only bring more instability to a region that has confounded American policy makers.

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