The Turkish lira has plummeted once further as Erdogan ruled out raising interest rates.

STANBUL, Turkey (AFP) – The struggling Turkish lira fell another 5% versus the dollar on Monday as President Recep Tayyip Erdogan used Islamic principles to justify not hiking interest rates to stabilise the currency.

Despite the fact that the annual rate of inflation has risen to more than 20%, Erdogan has urged the central bank to drastically decrease borrowing prices.

Economists estimate that as a result of the policy, consumer prices might rise by 30% or more in the next months.

Erdogan, though, claimed late Sunday on state television that his Muslim religion precluded him from supporting rate rises.

“They grumble that we keep lowering interest rates. Don’t hold your breath for anything else from me “In his broadcast remarks, he remarked.

“As a Muslim, I will continue to follow the teachings of our faith. This is the instruction.”

Muslims are forbidden from accepting or charging interest on money that has been loaned or borrowed, according to Islamic teaching.

Erdogan has previously used his Muslim religion to justify why he feels interest rates increase inflation rather than reduce it.

High interest rates stifle activity and decelerate economic progress.

When inflation becomes out of control, central banks are forced to hike their policy rates.