The bank cut its policy rate from 16 to 15 percent despite rising inflation and a fast-depreciating currency.

The lira, the worst performing emerging market currency in 2021, sank to an all-time low of 10.98 against the dollar ahead of the announcement.

It was later trading at 10.84 lira against the dollar.

Erdogan, an outspoken opponent of high interest rates to promote investment and economic growth, on Wednesday pressed for rate cut.

"As long as I am in this position, I will continue to fight against (high) interest rates, I will continue to fight against inflation," he said.

The lira has lost 31 percent of its value against the dollar since the start of the year and the annual inflation rate has reached nearly 20 percent -- quadruple the government target.

Turks are converting their liras into foreign currencies and gold to try and preserve their dwindling savings as a result.