Turkey's currency was in a free fall on Thursday, as it suffered one of its worst days since the country’s currency crisis in 2018.
The Lira plunged 6 percent to 11.3 against the dollar after the central bank decided on slashing interest rates by 100 basis points to 15 percent a move seen as dangerous for the emerging market economy.
The country’s monetary authority had been urged in recent months to ease rates by President Tayyip Erdogan who argued this week that high interest had been driving up inflation.
"The interest rates are the reason and the inflation is the consequence. I say to those who are trying to divert this to something else, do not waste your time. We will lift this scourge of interest rates from people's backs."
People on the streets of Istanbul, however, told Reuters they feel more burdened than ever.
"Everything is so expensive, the living conditions are getting really difficult. We cannot afford certain luxuries or tastes anymore."
"Everything is getting so expensive, including the merchandise. The prices are going up. So, our situation is really bad."
Erdogan’s push comes amid preparations for the country’s elections which are scheduled to be held by mid-2023.
Opinion polls however seem to suggest that the odds might be stacked against the leader, who’s been in power for nearly two decades now as his ruling AK party has slowly lost its reputation over its mismanagement of the economy.
The latest currency crunch has also prompted Turkey’s opposition leaders to ramp up calls again for an early election in a bid to reset overall economic policy.
The head of the main opposition camp told local media that Erdogan’s decisions showed he was “completely detached from reality”.
Inflation in Turkey currently stands at four times the official target and has lingered in double-digits for most of the past five years.