Your last comment about "the President thinks that high rates are part of a Jewish-led conspiracy to bankrupt Turkey" would benefit greatly from a reference or a quote, otherwise it is just as a good as propaganda. The apparent and most obvious reason for a president to not increase interests rates and to not decrease spending is the fear of recession. This is a controversial move but it has some interesting precedents: check the case of Malaysia after the Asian financial crisis of 1997.

Unfortunately he is correct, if poorly worded. I’m failing to find any sources in English right now on my phone, but he really did say this a couple years ago, pretty much word by word.

That does not always imply that the Turkish Central Bank is doing it because of his reasons, but Erdogan is remarkably like Netanyahu in that he knows well what is going to work on his audience, and at that time, this did.

Aside from the politics I agree raising rates would be good for foreign debt holders and bad to Turkey internally. Lower rates keeps exports high and jobs remain when employment is full start raising rates.

Wut? If you raise rates, then the price of bonds falls...if you hold debt, you want lower rates because you can then sell your bond at a higher price (theoretically, these are foreign-currency bonds so it isn't quite that simple).

And Turkey needs higher rates. The rate has been far below the natural rate for way too long. In capital markets, you saw Turkish companies make all these crazy acquisitions (in addition, to being forced by the govt into splashy infrastructure projects in areas that supported the govt)...the bust from this will be incredible (the only leverage Turkey has is that French/German banks are neck deep in this debt). Lowering rates is just prolonging the inevitable (the majority of Turkey's corporate sector is already functionally insolvent).

The lira is inflating out of control and you think high rates are bad for Turkey internally...

sigh