Last week's meltdown was the lira's worst since August when a full-blown currency crisis took hold and tipped Turkey's economy into a recession that could last deep into this year.

At 0438 GMT, the lira stood at 5.5725 against the U.S. currency, easing from a close of 5.5520. It had weakened to 5.8490 on Friday before settling at 5.7625, its worst closing value since October.

The selloff, which came just over a week before local elections across the country, was driven by Turks losing confidence in the lira and buying more foreign cash as the country's ties with Washington deteriorated, bankers said.

Investors voiced concern that Turkey's government responded by threatening bankers and investigating their foreign exchange operations.