The dollar went down to 3.4919 by 3.10 p.m. local time.
The drop came after the Turkish Central Bank issued a statement earlier stating that the inflation rate forecast would be held at 7.5 percent.
Speaking at a press conference on the bank's 2017 monetary and exchange-rate policy, Central Bank Governor Murat Cetinkaya said Turkey’s economic activity has been recovering in the last quarter of 2016, while fluctuations in the Turkish lira will not make a "durable" impact on the economy.
Cetinkaya announced that Turkey’s Central Bank would hold its year-end inflation forecast at 7.5 percent, citing a favorable outlook for food prices and a moderate domestic demand despite foreign exchange volatility as reasons.
"The bank will continue to support financial stability while aiming to keep inflation close to the target," he added.