The Turkish lira plummeted to 14.75 against the U.S. dollar, prompting Turkey's Central Bank to intervene by selling off foreign currency.

The lira has been plunging to record lows as the bank has slashed borrowing costs by 4 percentage points since September despite soaring inflation.

The rate cuts are in line with the wishes of President Recep Tayyip Erdogan, who has advocated keeping interest rates low to boost growth. Economists argue in favor of raising rates to tame inflation, but Erdogan maintains that high interest rates cause rising prices.

Erdogan is standing firm on his policy of low borrowing costs, raising expectations for another rate cut when the Central Bank's monetary policy board meets Thursday. Adding to concerns, S&P Global Ratings lowered its outlook for Turkey's credit rating to negative from stable Friday, according to media reports.

On Monday, the Turkish lira plunged before the Central Bank announced it was intervening by "selling transactions due to unhealthy price formations in exchange rates." It was the bank's fourth such intervention in recent weeks.

The currency was trading at 14.13 against the dollar after the bank's intervention — still 1.8% weaker than Friday's close.

The weakening lira has accelerated inflation in Turkey, seriously eroding people's purchasing power and making even basic needs unaffordable.