ISTANBUL- Turkey's lira weakened on Tuesday as the military carried out exercises on the Iraqi border, ahead of a planned independence referendum in northern Iraq next week.

The lira TRYTOM=D3 dropped to 3.5050 to the dollar by 0841 GMT, its weakest since August 21.

"The increasing tension before the referendum in northern Iraq continues to effect lira negatively," Kapital FX Research Assistant Manager Enver Erkan said.

(Writing by Ezgi Erkoyun; Editing by Dominic Evans) ((; +90-212-350 7051; Reuters Messaging:;))