The Turkish President attended a news conference in Hungary.
Turkey's lira dropped to a new record low of 12.49 to the dollar on Tuesday, a level that was well past the psychological barrier of 11 to the dollar.
Tim Ash, senior emerging markets strategist at Bluebay Asset Management, said in a note that the news was a reflection of the insane monetary policy settings Turkey is currently operating under.
At 1 pm local time on Tuesday, the lira was trading at 12.168 to the dollar.
The sell-off was triggered after Turkish President Recep Tayyip Erdogan defended his central bank's continued contentious interest rate cuts. He labeled the move as part of an economic war of independence, rejecting calls from investors and analysts to change course.
Turks have seen the price of basic goods soar and their local currency salaries plummet because of Turkey's 20% inflation. The lira has lost 40% of its value this year and 20% since the start of last week.
At this time in the year, the lira was trading at roughly 5.6 to the dollar. It was already making news, as the value of 3.5 to the dollar was a dramatic drop.
Turkey's currency has been in a downward slide since early last year, thanks to a combination of tensions with the West, current account deficits, and mounting debt, but most importantly, a refusal to raise interest rates to cool inflation.
In the past, Erdogan has rejected economic orthodoxy to insist that raising interest rates actually worsens inflation.
The lack of independence of Turkey's central bank is feared by investors.
Tumen was dismissed from the central bank in October by the president.
Tumen said that the experiment had no chance of success and that it was time to return to quality policies.
The central bank cut rates by 100 basis points last Thursday. Since September, rates have been cut by 400 basis points.
Paying Turkey's central government debt in foreign currency is more difficult as the lira continues to fall.
Ash said that there is a perverse economic experiment when a central bank has no monetary policy.
The ability of the Central Bank of Turkey to raise policy rates has been taken away by the government of Turkey.
