Turkish Lira Nosedives as Erdogan Hints at Rate Cuts

The Turkish lira hit a historic low on Wednesday after President Recep Tayyip Erdogan hinted at cutting interest rates as inflation is above 17%.

The volatile currency fell to as low as 8.88 against the greenback, down 4%, after going up later to recover some losses at around 8.59 per dollar.

Erdogan said: “I spoke to the central bank governor today - we definitely need to cut interest rates. Therefore, we need to see July and August to start cutting interest rates," adding that lower interest rates would help investments. He then added that interest rates are the "devil" and clings to the belief that lowering them will reduce inflation, a theory which is totally against economics.

His comments further strained Turkish markets, making the lira more vulnerable than ever.