The Turkish lira sank to a record low against the dollar on Thursday after the central bank slashed interest rates for the third consecutive month following pressure to do so from the president.

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

The beleaguered lira, the worst-performing emerging market currency in 2021, sank to an all-time low of 11.30 against the dollar, but later pared down losses.

The announcement of the bank's decision was delayed five minutes, with bank officials reportedly telling Turkish media that it was due to a "technical failure", dismissing social media rumors that the decision had been leaked.

Turkish President Recep Tayyip Erdogan, an outspoken opponent of high-interest rates to promote investment and economic growth, on Wednesday pressed for a 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.

"We will remove this interest rate trouble from the shoulders of the people. We will never let our people be oppressed by interest [rates]," he said.

In an address to his ruling AKP party members in the parliament, Erdogan also justified his decision with a verse from the Koran which strictly forbids interest.

"I cannot stand by those who defend interest," he said.

Erdogan, who has in the past fired a number of central bank governors, is notorious for his unorthodox belief that high-interest rates cause inflation instead of helping tamp it down.

Conventional economic theory states the exact opposite is true.

Erdogan once called interest rates the "mother and father of all evil."

Fawad Razaqzada, the market analyst with ThinkMarkets, said the market clearly did not take the central bank seriously anymore because it has lost any credibility it had.

"Erdogan is running the show," he said.

"If he wants to lower interest rates he will get lower rates, regardless of how high inflation might be or how the economy is doing."

The lira has lost 32.8 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.

The Turkish central bank has lowered its policy rate by 400 basis points to 15 percent since August.

This means Turkey has a negative real interest rate - a policy that devalues lira assets and gives additional incentive for people to buy foreign currencies and gold.

"Stop Erdogan!" opposition leader Kemal Kilicdaroglu tweeted shortly after the central bank announcement, using a hashtag (#HemenSecim or elections right away in English).

Kilicdaroglu on Wednesday called Erdogan the real "central bank governor" and accused him of dragging the country into catastrophe.