Turkey's central bank just made a surprise rate cut even as inflation hovers near 80%, driving the lira near record lows against the dollar

The lira fell against the US dollar after Turkey's central bank cut its benchmark interest rate by a percentage point.

The Central Bank of the Republic of Turkey said in a statement about its rate-cut decision that there has been a loss of economic activity. The benchmark rate was reduced to 13 percent from 14 percent, which was more than the 21 economists who had expected no change.

The dollar gained ground against Turkey's currency and left it near a record low.

Someone is plowing a lot of money into the market. John Kicklighter is the chief strategist at DailyFX.com. The 100bp cut to 13% earlier today has only pushed the dollar up by 0.8%.

The decision by the Monetary Policy Committee was made as inflation stood at 79.6% in the 12-month period through July due to rising energy costs.

The central bank said it expects the disinflation process to start on the back of measures taken to strengthen sustainable price and financial stability.

The central bank has been pressured to keep rates low by Turkey's president. The country's dependence on overseas energy products could be made more expensive by a depreciating lira.

There has been an increase in Russian crude imports at ports in Turkey and other countries in the Mediterranean region.

The central bank said it was important that financial conditions remained supportive to preserve the growth momentum in industrial production and the positive trend in employment.