The lira has hit a fresh low of 6 to the dollar, amid strained ties with Washington over the jailing of an American pastor. Europe's banks are also worried about their exposure to Turkey's woes.
It is in Germany's interest for Turkey to be "economically prosperous," said Chancellor Angela Merkel. But she warned this couldn't be at the expense of state interventions, as the Turkish lira continues to drop.
Investors are losing faith in former economic reformer Tayyip Erdogan. It's not ruled out that the current crisis may end badly for him, but also for economies in Europe, says DW business editor Henrik Böhme.
The central bank said it will "provide all the liquidity the banks need" as the Turkish lira continues to tumble. Prosecutors have meanwhile threatened to go after those who "threaten economic security."
The Turkish lira crash is threatening to turn into a debt and liquidity crisis, with no end in sight. Instead of acting the Turkish leadership has warned of an "economic war," and hit back at a "currency plot."
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