Turkey's currency the lira hit a new record low on Tuesday as investors moved out of emerging markets amid the collapse of the Russian ruble and fretted over the impact of raids against Turkish opposition media.
The lira hit a record low in value of 2.41 lira to the dollar, worse than Monday's record low in value of 2.39 lira to the dollar.
Against the euro, the currency struck a low in value of 3.03 lira to the euro, breaking through the crucial 3.0 barrier.
The currency has now slumped past the lows seen in late January when the country was on the verge of a full scale currency crisis before the central bank intervened with an emergency rate hike.
However in afternoon trading the currency staged a slight recovery to trade at levels close to its opening value.
The lira was supported by a central bank announcement it would cover the foreign exchange needs of energy importing state-owned enterprises, reducing fears of their exposure to the current turbulence on emerging market currency exchanges.
"The foreign exchange needs of the energy importing state owned enterprises will be met directly" by the bank and the treasury, it said in a statement.
In late afternoon trade, the lira was trading at 2.36 lira to the dollar, a slight improvement from its closing value on Monday. It was trading at 2.96 lira to the euro.
The arrests of over two dozen journalists, television producers and police on Sunday rattled markets already concerned about Turkey's exposure to emerging market weakness linked to the embattled Russian ruble.
Sentiment on the lira turned negative on Monday when Erdogan gave a combative speech blasting the European Union for criticising the arrests.
The slide of the Russian ruble -- despite an emergency rate hike -- has added to concerns about the economic health of top emerging markets.
But Turkish Economy Minister Nihat Zeybekci played down concerns about the lira, saying markets would be left to set its value and there were no plans for radical measures.
"I don't believe in the need to take measures with strong intervention. I believe that the market can take care of itself," he was quoted by Turkish media as saying.
The bank has in the second half of this year resisted pressure from the government and President Recep Tayyip Erdogan to aggressively prune rates in order too stimulate growth.
Its one-week repurchase rate stands at 8.25 percent and the marginal funding rate at 11.25 percent. The main rates have been left unchanged at its last meetings.