The Turkish lira hit a new record low against the US dollar at levels of 13,500 this morning, Wednesday, December 1, with the opening of European markets after Turkish President Recep Tayyip Erdogan defended his policy and strategy.

Speaking to the Turkish Radio and Radio Corporation on Tuesday, Erdogan indicated for the third time in less than a month that the interest-cutting policy would boost investments, employment, production and growth and would weaken inflation.

Erdogan adopts the directive of the Turkish Central Bank through an economic theory that contradicts all international theories, where the theory says that lowering interest rates is the way to reduce inflation and not the other way around, as seen by most economists around the world.

The Turkish lira has lost more than 40% of its value since the beginning of the year, after the Turkish Central Bank cut interest rates in the last three meetings to settle at 15%, with expectations of a cut in the next bank meeting as well.

The latest data issued by the Turkish economy showed the growth of Turkish GDP by 7.4% in the third quarter on an annual basis, supported by strong domestic demand, but despite this growth, the currency crisis and rising inflation may reflect much lower numbers in the fourth quarter.