(Bloomberg) — Turkey’s central bank cut its key interest rate for a fourth consecutive month on Thursday in support of President Recep Tayyip Erdogan’s unorthodox monetary policy, despite a worsening inflation outlook and the lira hitting a series of record lows in recent months.

Monetary Policy Committee cut its rate by 100 basis points, to 14%. This was in line with the median estimate of 22 economists in Bloomberg’s poll. With the exception of one analyst, all saw Governor Sahap Kaioglu cut rates. However, the dissident expected that the central bank will hold. 

Now, 500 basis points have been lowered by the bank’s benchmark since September. This was a time when most counterparts were considering increasing their rates to stem price rises. As investors hoped for another rate decrease, the dropped below 15 USD on Thursday. The currency’s lost about half its value this year. 

Erdogan’s distaste for higher borrowing costs has been linked to Islamic proscriptions on usury. Erdogan believes producers should pass on interest to customers so that they can raise prices. 

He fired Kavcioglu’s three immediate predecessors for raising rates to tame inflation, and stepped up calls for cheaper borrowing to boost economic growth as his popularity fell amid the pandemic. The price of goods continued to spiral, and in November the annual rate of consumer inflation rose to 21.3%.

The president has attacked what he brands the flow of fickle “hot money” — speculative foreign inflows into Turkish securities — attracted by high interest rates and a strong lira. His economic model predicts that cheaper borrowing will increase manufacturing, create new jobs and stabilize inflation. This week Finance Minister Nureddin Nebati said Turkey’s determined to not raise interest rates. 

As consumer inflation rose, real yields fell as a result of recent rate cuts. Inflation expectations for the next 12 months surged to 21.39% from 15.61%, according to the central bank’s December survey of market participants.

Before the year ends, the central bank will publish the main framework for monetary and exchange rates policy in 2022. Statistics agency will publish the December inflation data in January.

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