The Turkish lira decreased to new lows on Tuesday against the U.S. dollar and euro, which renewed their record highs at 3.7840 and 4.0081.

The Central Bank of the Republic of Turkey (CBRT) stepped in to curb the depreciation in lira on Tuesday, lowering banks' foreign currency reserve ratio by 50 basis points, providing $1.5 billion to markets. The borrowing limit from the CBRT's Interbank Money Market has been decreased to $22 billion to be effective as of Jan. 11, the statement added. The bank said that the developments in markets are closely being monitored and if necessary, further steps can be taken to protect financial stability.

Following CBRT's statement, the USD/TRY parity rate retreated back to 3.74 level, later exceeding 3.77 level. A similar move was observed in EUR/TRY parity rate as after falling near 3.96, the rate later climbed to 3.99 level.

The Turkish lira's loss in value against U.S. dollar has reached seven percent since Jan. 1, while the euro has posted gains near seven percent.

U.S. dollar's global strength is among the key factors triggering Turkish lira's losses.

International credit rating agency Moody's report, released on Monday, which predicted decreasing profits and increasing nonperforming loans for Turkish banks in 2017 was another factor dragging down the lira.

The ongoing heated debate over constitutional reform, including a switch to the presidential system, the continuation of security risks with terror attacks, and uncertainty over whether Central Bank of the Republic of Turkey (CBRT) would be able to use its interest card to stall the depreciation are other factors leading to the decrease in the lira's value.