Turkey’s central bank shocked markets on Thursday by cutting its main interest rate by 100 basis points to 13%, saying it needed to keep driving economic growth despite inflation hitting nearly 80% and a monetary tightening trend among its peers worldwide, Reuters reported.

The lira dropped more than 1% as the bank took its latest step down the unorthodox policy path advocated by President Recep Tayyip Erdogan that aims to provide targeted cheap credit to help boost Turkish exports.

There had been virtually no signal that another rate cut was in the works and no economist polled by Reuters had predicted one, given that inflation has soared to 24-year highs, eating deeply into Turks’ earnings and savings.

The bank had held its main rate at 14% for the past seven months after cutting it by 500 basis points towards the end of last year. That policy easing sparked a currency crisis in December that sent inflation soaring.

The rate cuts long urged by Erdogan – who holds sway over the bank after ousting several of its governors in recent years – have left real interest rates in deeply negative territory and have accelerated a cost-of-living crisis for Turkish households.

Analysts expressed dismay at the decision.

“I am speechless. It is not the obvious thing to do at all,” said Kieran Curtis, fund manager at Abrdn in London.

The central bank’s policy-setting committee said it needed to act because leading indicators pointed to a loss of economic momentum in the third quarter.

“It is important that financial conditions remain supportive to preserve the growth momentum in industrial production and the positive trend in employment in a period of increasing uncertainties regarding global growth as well as escalating geopolitical risk,” it said in a statement.

The new policy rate “is adequate under the current outlook”, it said, adding the growing gap between its policy rate and rising loan rates was reducing “the effectiveness of monetary transmission”.

The currency crisis last year saw the lira fall 44% against the dollar, stoking inflation via imports. The currency has lost a further 27% so far this year while inflation hit 79.60% in July, partly stoked by fallout from the war in Ukraine.

The lira on Thursday broke through 18 to the dollar for the first time since December and was on track as of 1246 GMT for its weakest ever close of 18.08.