South Africa, Indonesia and Mexico are also among a group of emerging market economies that have seen their currencies tumble as investors desert countries that have grown quickly using large amounts of borrowed funds in favour of safer havens.
Several emerging markets have confronted the same struggles, dogged by a strengthening USA dollar that makes it more hard for countries such as Turkey to pay back hefty external debt. The lira has lost roughly 40 percent of its value against the US dollar this year, and its inflation rate sits at about 18 percent. Inflation also soared this month to a 15-year high of nearly 18%.
Investors have focused their concerns on Ankara following Erdoğan's re-election and his grab for control of the country's economy.
Relations with the United States deteriorated last month after Washington imposed sanctions on two Turkish ministers over the detention of an American pastor and President Donald Trump doubled steel and aluminium tariffs on Turkey.
The bank is expected to raise interest rates on September 13. Growth slowed to an annual rate of 5.2% in the second quarter, from the first quarter's 7.4%. He repeated however, his belief that interest rates should be cut, calling them an "instrument for exploitation". In fact, he calls himself the "enemy of interest rates", and was even pushing for lower rates as recently as Thursday morning.
That includes Argentina, which holds the distinction of having the world's highest interest rate. Subsequently, the lira lost some 25 percent of its value while Turkish authorities have taken a series of steps created to support the currency, with the central bank taking liquidity measures and the banking watchdog limiting derivative transactions.
In a decision announced earlier on Thursday, he ruled that property sales and rental agreements must be made in lira, putting an end to such deals in foreign currencies. The government has transferred to the TVF stakes worth billions of dollars of state assets, including stakes in flag carrier Turkish Airlines, major banks and fixed-line operator Turk Telekom. "If you say ´inflation is the cause, the rate is the result´, you do not know this business, friend", he added.
"Tight stance in monetary policy will be maintained decisively until inflation outlook displays a significant improvement".
"Inflation expectations, pricing behavior, lagged impact of recent monetary policy decisions, contribution of fiscal policy to the rebalancing process, and other factors affecting inflation will be closely monitored and, if needed, further monetary tightening will be delivered", the statement said.