On track for its biggest daily jump in weeks, the lira at 1308 GMT stood at 5.63 against the dollar, its best reading since April 8.

The currency closed at 5.7875 on Friday, before Erdogan met Trump at the G20 summit in Japan at the weekend.

Turkey's 5-year CDS slipped 14 bps over a 5-year period to 384 bps, its lowest since early April, according to IHS Markit data.

NATO allies Turkey and the United States have been at odds over the S-400s purchase, with Washington warning of US sanctions if the delivery took place.

The dispute has been a source of concern for investors, putting pressure on the lira.

The United States says the S-400s will compromise its Lockheed Martin Corp F-35 fighter jets, of which Turkey is a producer and buyer.

Washington has also formally started the process of expelling Turkey from the F-35 programme, halting the training of Turkish pilots in the United States.

But on Saturday, Erdogan said Trump had told him there would be no sanctions over the Russian deal, after Trump said Turkey had been treated unfairly over the move.

Broadcaster NTV on Sunday reported Erdogan as telling reporters that the first delivery of the S-400s would take place within 10 days and that he believed the dispute would be overcome "without a problem".