Under pressure from Erdogan, bank cuts rate to 13
Last year39;s easing sparked currency crisis, stoked inflation
Annual inflation hit 24year high of 79.6 in July
Bank says it acted to preserve economic momentum, jobs

ANKARA, Aug 18 Reuters Turkey39;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.

The lira dropped as much as 1.2 to 18.15 per dollar as the bank took its latest step down the unorthodox policy path advocated by President 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 24year highs, eating deeply into Turks39; 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 costofliving crisis for Turkish households.

Analysts expressed dismay at the decision. 

JPMorgan said in a note…