We use Turkish Liras in Turkey. (1 dollar = 2.14 TL, 1 EU = 2.87 TL today)
To exchange your money is a very easy thing in Istanbul. You will see many exchange offices on the streets. There are several offices on Istiklal Street. If you can convert your money to dollar or euro before coming, you will not have any problem to change it. You can also change other countries' (UAE, KSA) money.
The exchange rate of TL can be seen by this web site. Just select the date.