LONDON, (Reuters) – The central bank of Turkey cut its policy rate by 100 basis points on Thursday to 14%. This was despite the fact that inflation rose above 21% and sent the lira down to a new record low.

The following is an analysis of the latest move by analysts:

JOHN HARDDY, SAXO BOBBY

Turkey reduces 100 bps by 14.0% to meet expectations, however it is amazing”

DENNIS SHEN, SCOPE RATINGS

“The tolerance of lira pain by the central bank is certainly higher with President Tayyip Erdogan more or less in control of rate policy.”

“The only thing is that even if destabilising lira devaluation is somehow being fully justified away as being good for correction of the current account and raising exports, now that the lira crisis is starting to have an effect on dampening growth conditions – whether such weakening economic growth might force Erdogan to change course ahead of elections by 2023?

However, any rate rise may not be immediate even if central banks pause rate cuts for the near term. It could instead mean capital controls and more FX Swaps with domestic and friend allies. Reserves to help lira in case of lira price collapses.

JASON TUVEY, CAPITAL ECONOMICS

“Today’s move provides further evidence, if any were needed, that macro developments are playing little role in the CBRT’s policy formulation.”

The accompanying statement indicates that the easing cycle may be put on hold early next year, but the lira is likely to remain under pressure, and capital controls will continue.

IPEK OZKARDESKAYA SWISSQUOTE BANK

“Despite heavy opposition from the market, the central bank in Turkey took the decision to reduce the rates by 100 basis points. This bold move will undoubtedly cost Turkey much money and headaches. A strong selloff in the Lira is the result of this knee-jerk reaction. “I expect USD-TRY’s year to be over 17-19.”