The Turkish central bank ramped up its monetary conditions on Monday to shore up the local currency, the lira after it hit a record low value against the dollar.
The bank announced that it was applying immediately a "strong" tightening of monetary conditions.
"A strong extra monetary tightening will start as of today," the bank's governor Erdem Basci said in a statement.
"It's essential that the extra monetary tightening is strong, effective and temporary," he said.
In late morning trading the lira was being traded at 1.9488 to the dollar, having firmed from a record weak level of 1.9740 earlier in the day.
Basci added that the latest measures would be applied for as long as required, depending on developments on the foreign exchange market.
On the government debt market, Turkey's 10-year borrowing rate stood at 8.8 percent as the central bank announced its new tough action.
The yield had climbed to more than 9.0 percent on June 21, amid a wave of unprecedented protests against Prime Minister Recep Tayyip Erdogan and his Islamic-rooted government, seen as increasingly authoritarian.
The borrowing rate was slightly above 6.0 percent in April.
The Turkish economy grew by 2.2 percent in 2012, short of the government forecast of 3.2 percent expansion.
This was a major slowdown from 2010 and 2011 when the Turkish economy grew by 8.9 percent and 8.8 percent respectively, causing concern that it might be overheating.
Turkey, in common with many emerging economies is subject to signals from the US Federal Reserve bank that it will soon begin to wind down its special injections of money into the financial system to support the US economy.
Some of this funding has gone abroad in search of higher returns from higher risk investments, such as government debt issued by emerging economy governments.
The prospect that US monetary conditions will become tighter has reduced willingness to accept risk and has caused some funds to be withdrawn from emerging economies, putting downward pressure on their currencies and raising interest rates on bond markets.