The lira is down 3% next to record lows as Turkey has stumbled upon the unknown

ISTANBUL (Reuters) – It fell again on Wednesday, worried about rising inflation and other economic downturns, as President Tayyip Erdogan pushed for a defense of recent rate cuts after a 15% crash a day earlier.

The lira weakened to 13.1500 against the dollar before returning to 13.05 for 0703 GMT. It touched a low of 13.45 on Tuesday.

Currency has hit record lows in 11 consecutive sessions, bringing its losses from the beginning of the year to 43%, down almost 24% from the beginning of last week.

Although Erdogan has vowed to defend the central bank’s monetary policy and win its “economic war of independence,” there is widespread criticism from those demanding action to overturn the currency discourse, even from top economists.

There was no intervention to stop the disaster. The central bank said on Tuesday it could only do so under “excessive volatility” under certain conditions.

“With the current exchange rate, official inflation could be above 30% in the coming months. With the current deposit rate, that means a real interest rate of 15%,” former chief economist Hakan Kara wrote on Twitter (NYSE :).

“If urgent action is not taken, the financial system cannot deal with it,” he added.

Erdogan has put pressure on the central bank to push for an aggressive easing cycle aimed at boosting exports, investment and employment, even as inflation rises to 20% and accelerates the depreciation of the currency, eating deep into Turkish profits.

Many economists called the rate cuts irresponsible while opposition politicians resorted to immediate elections. The Turks told Reuters that the dizzying collapse of the money was ruining their home budgets and plans for the future.

After a meeting between Erdogan and Sahap Kavcioglu, the governor of the central bank, the bank released a statement saying the sale was “realistic and completely far” from the economic bases.

Tuesday’s slide was the biggest pound in 2018 since the currency crisis led to a severe recession, bringing three-year economic growth and double-digit inflation.

The central bank has cut rates by a total of 400 points since September, leaving real yields very negative, as almost all other central banks have begun to harden against, or are preparing to, rise in inflation.