Turkish lira banknotes are seen in this picture illustration taken in Istanbul in this file picture.

Ankara - Turkey's currency sank to new record lows on Monday, pummelled by the continuing political problems for the government of Prime Minister Recep Tayyip Erdogan.

The lira fell to 2.2436 to the dollar and 3.0419 to euro in midday trading, although the Istanbul stock exchange was up a narrow 0.25 percent to 65,798.63 points.

The latest declines come ahead of a central bank meeting on Tuesday to decide on monetary policy, although it has been reluctant in the past to raise interest rates to defend the currency.

Last year the bank sold an estimated $17.6 billion in foreign currency reserves to support the lira, which is under pressure not only from the political crisis but also US Federal Reserve policies. - Sapa-AFP