This week, the lira picked up against the dollar after Qatar pledged $15bn investment into the country’s financial markets after talks with Turkish President Recep Tayyip Erdogan.
Today’s rate saw 5.80 lira to the dollar, an improvement from the record low 7.47 lira earlier this week.
However worries remain for the Turkish economy, which is heavily reliant on foreign currency loans, meaning it is becoming increasingly difficult for Turkey to pay back loans with a drastically weakened currency.
The potential knock-on effect on other emerging market is already being seen: for example, on Thursday, India’s rupee hit a record low 70.33 rupees to $1, and the South African Rand has also taken a hit as a result of the crisis.
One immediate effect in Britain has been felt: foreign money suppliers are running out of lira as holidaymakers rush to book holidays to Turkey.
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On Wednesday, Post Office Travel Money apologised after running out of the currency at some of its branches.
They reported a surge in demand, almost triple compared with the same time last year.
A spokesman said: “A small number of branches may be running low due to the demand.
We expect to replenish stocks over the next 24 to 36 hours.”
However, experts are advising it might not be wisest to exchange your lira in the UK, where rates are poor.
Rather, take your lira with you and shop around when you arrive.
There have also been reports that some hotels are only accepting foreign currency amid the crisis, so advice is not to change too much lira before you know exactly what you’ll need.
What’s behind the crisis?
The crisis began days after US President Donald Trump announced a doubling of steel and aluminium tariffs on Turkish exports to America.
The tariffs are in response to Turkey’s refusal to extradite an American pastor, Andrew Brunson, who is being held on terrorism charges.
Responding to Mr Trump, Mr Erdogan said in a statement this week: “You act on one side as a strategic partner, but on the other, you fire bullets into the foot of your strategic partner.
“We are together in Nato and then you seek to stab your strategic partner in the back.”
On Wednesday, Turkey doubled tariffs on some imports from the US – such as passenger cars, alcohol and tobacco.
President Erdogan has further blamed the lira’s fall on an “operation against Turkey” rather than prevailing economic conditions, calling it “deliberate attacks”.
Analysts agree, saying the dispute with the US has contributed to the lira’s plunge.
However, President Erdogan has been widely criticised for his government’s economic policy.
In Turkey, unlike nations such as the US and those in the EU, the central bank is controlled by the government, allowing control over interest rates and inflation.
President Erdogan is criticised for keeping interest rates low even though inflation is more than three times the central bank’s target.