ISTANBUL, Nov 23, Reuters -- Turkey's lira recouped losses to trade on Tuesday after a record low in the previous session when President Tayyip Erdogan defended his cut in interest rates and pledged to succeed in his economic war of independence. The lira logged record lows for a tenth straight session on Monday when it closed at 11.4000. The unit lost a third of its value this year.
There was a new low in consumer confidence and speculation about a cabinet overhaul and data showing an emergency rate hike would be needed soon, according to analysts.
Under pressure from Erdogan, the central bank cut its policy rate by 100 basis points to 15%, a well-below inflation of nearly 20%, signalling further easing.
In a news conference on Monday, Erdogan said that tighter monetary policy would not lower inflation.
After a cabinet meeting, Erdogan said that I reject policies that will weaken our country, condemn our people to unemployment, hunger and poverty.
The central bank has slashed rates by 400 basis points since September, which is a risky policy mistake, according to analysts. Societete Generale said it would need an emergency hike as soon as next month.