As of 5:39 p.m. Turkish time (14:39 GMT), the lira slumped by 1.6 percent against the dollar, trading at 2.82 lira per dollar, a historic low for the currency.
Turkey's ruling Justice and Development Party (AKP) won the elections on June 7 but for the first time since 2002 lost the parliamentary majority and will not be able to form a government alone.
On July 9, Turkish President Recep Tayyip Erdogan instructed AKP leader, incumbent Prime Minister Ahmet Davutoglu, to form a government. The prime minister is currently holding coalition talks with the leaders of three other parliamentary parties. If a coalition government is not formed within 45 days of the order being given, the president will have to dissolve the parliament and call early elections.
A new round of coalition talks between the AKP and Turkey's main opposition Republican People's Party (CHP) ended on Monday without an agreement.
According to media reports, the lira may drop further to trade at 3 lira per dollar amid the growing fears of early elections in the country.
