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The Turkish lira hit fresh lows on Thursday after the central bank fired the latest salvo in President Recep Tayyip Erdogan's "economic war of independence" by cutting interest rates for the fourth successive month. 

The main rate decreased from 14 to 15% in the face of an annual inflation rate that surpassed 20% and is expected to climb even higher over the next few weeks.

That said, the lira began trading down around 4% after the announcement. 

"The accompanying statement suggests that the easing cycle will be on pause early next year but, even so, the lira will remain under pressure and capital controls are likely," the Capital Economics consultancy said in a research note.

See more: The Economic Crisis in Turkey

Erdogan's economic war

The currency has lost more than half of its value since the beginning of the year, including 30% in the last month alone, as authorities give in to Erdogan's demands to lower borrowing costs amid rising inflation.

This unconventional strategy has wiped out people's savings and pushed large sections of Turkish society below the poverty line.

A dollar could buy three liras in 2016 and 7.43 liras on January 1. It was worth 15.35 liras on Thursday after opening the week at around the 13.80 mark.

However, Erdogan has called for "patience" and argued that his approach will ultimately make Turkey less dependent on outside factors such as the scale of foreign investment and the price of commodity goods.

Turkey Raises Minimum Wage

Turkey’s minimum wage will increase 50% in 2022 to help offset living costs that have surged as the central bank released a series of lira-weakening interest-rate cuts to support Erdogan’s economic plan.

During a televised news conference, Erdogan declared that the monthly net minimum income will be 4,250 liras ($275). The minimum wage was set at 2,826 liras in 2021, which equated to $380 at the start of the year but has since dropped to $186 due to the lira's 51% depreciation.