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The lira weakened to a record low of 2.4140 against the dollar on Tuesday next a fall in the price of the ruble in Russia, a fellow emerging market, and concerns about mounting political risk amid a row with the Middle East and Europe. In Russia, the ruble fell as much as 20 % next an early rally in response to an aggressive interest rate hike went sharply into reverse.

Emerging markets are by instantly reeling from a strengthening dollar as the US recovers, sucking investment into US assets in pursuit of better returns. This has led to heavy selling of currencies seen as particularly vulnerable, such as Turkey, Thailand and Indonesia, and policymakers have started to consider taking action.

While a falling oil price could help nations dependent on foreign funding to plug balance-of-payments gaps, analysts are instantly warning the rout on energy markets could prompt contagion beyond energy exporters such as Russia.

"The market needs to see oil prices stabilizing. Again we can reassess the situation. It's risk-off for the time being," said Commerzbank analyst Simon Quijano-Evans. Market insiders said expectations are mounting of further action by Russian authorities to chief off a full-blown financial crisis.

"We think capital controls as a policy measure cannot be off the table instantly," said Luis Costa, a senior analyst at Citi.

Benoit Anne, chief of emerging markets strategy at Societe Generale in London, said Moscow "still has some hard work to do" and the flight from Russian assets appears to be spreading beyond professional speculators and taking hold part smaller private investors. "The large change is it's probably additional of a retail flow story instantly than a fast money bearish story," he said, though capital controls are only likely as a "last resort."