By 1504 GMT, the lira eased to 1.8035 against the dollar from 1.7944 late on Monday. Against its euro-dollar basket it weakened to 2.0707, from 2.0696.

The yield on the two-year benchmark bond closed at 7.22 percent in thin trade ahead of a three-and-a-half day holiday, up from Monday's close of 7.18 percent.

Turkish markets will be closed from midday (0900 GMT) on Wednesday until Oct. 30 due to the Eid Al-Adha religious festival and Turkey's Republic Day holiday.

Analysts said the deterioration in global markets after a slew of weak US corporate results and a rise in Spanish borrowing costs weighed on investors' sentiment towards emerging markets including Turkey.

The central bank will release its quarterly inflation report on Wednesday at 0700 GMT. The bank cut its year-end inflation forecast to 6.2 percent in July from 6.5 percent.

The main share index closed 0.64 percent down at 71,762 points, outperforming a 1.07 percent fall in the emerging markets index.