People walk past a currency-exchange board showing the U.S. dollar and euro rates against the Turkish lira in Istanbul.

The Turkish lira dropped by as much as 5 percent against the dollar on Thursday morning, as the country gears up for elections this weekend.

The greenback bought 5.569 lira at around 8:45 a.m. London time on Thursday morning, from a level of around 5.33 lira at the close of trade Wednesday. Reuters data showed it fell by as much as 5 percent during morning trade.

The fall comes on the back of dismal central bank figures revealing a dramatic decrease in international reserves. The Turkish central bank's net international reserves for the week ending March 22 sat at 142 billion lira ($24.7 billion), showing a near $10 billion drop in the first three weeks of March. The implication being that the country has been burning through its reserves to stabilize its currency.

These are "approaching mission critical numbers," commented Timothy Ash, a Turkey expert and senior emerging markets strategist at Bluebay Asset Management, in a research note. "IMF (International Monetary Fund) may well be required post election."

The Turkish currency has undergone a dramatic 24 hours as the government instructed national banks to withhold lira liquidity from the offshore swap market to prevent a steep fall in the lira. The move aims to prevent short selling on the currency ahead of local elections on Sunday that are widely seen as a referendum on Turkish President Recep Tayyip Erdogan. Country analysts and national polls expect losses for Erdogan's AK Party.

The currency plunged by around 30 percent in 2018, in what was a turbulent year for the country.