Against that backdrop, investors have been fleeing the lira for safe havens like the euro.
"The EUR jumped sharply versus a variety of currencies, likely driven by additional capital flow out of Turkey and a comment by ECB Board Member/Bundesbank President Jens Weidmann that too-low interest rates could endanger political reforms in Europe," Pierpoint Securities' Robert Sinche wrote in a note Friday.
The uncertainty is a clear contributor to the euro's rise, others noted, as assets flee the country. (By way of comparison, more than $1.3 billion in capital fled the country in late May and early June amid unrest at that time, the country's central bank said).
"Even if there are occasional lulls, political volatility in Turkey is set to continue into the New Year with on-going negative implications for the economy," Eurasia Group's Naz Masraff wrote in a note.
"An escalation of the power struggle within the state's institutions, including the police and the judiciary, will further undermine the country's rule of law and have a negative impact on market sentiment."
—CNBC Asia's Katie Holliday and Reuters contributed to this report.