Turkish lira dips to new low after another interest rate cut

Turkey’s Central Bank again cut interest rates despite soaring consumer prices that are making it difficult for people to buy food and other basic goods

ANKARA, Turkey -- Turkey’s Central Bank again cut a key interest rate Thursday despite soaring consumer prices that are making it difficult for people to buy food and other basic goods, sending the country's currency to record lows against the U.S. dollar.

The bank’s monetary policy committee said it is cutting the rate from 15% to 14%, though inflation is running at 21%, according to official data.

It is in line with the policies of President President Recep Tayyip Erdogan, who has been pressing for low borrowing costs to boost growth, exports and investments ahead of elections in a year and a half.

The Central Bank has now slashed rates by 5 percentage points since September, running against conventional economic policy of raising interest rates to ease high inflation. Erdogan contends that high interest rates cause inflation and has declared himself an “enemy” of high borrowing costs.