ISTANBUL, Nov 19 (Reuters) - Turkey"s lira gave up earlier gains and dropped as much as 2% to a new record low on Friday, a day after crashing 6% when the central bank, under pressure from President Tayyip Erdogan, slashed rates and signalled more risky easing was on the way. The lira first rallied to 10.83 against the dollar before fizzling to 11.32, notching an eighth straight session of all-time lows. It was worth 11.2 at 1632 GMT, raising risks for the economy and for Erdogan"s political future. The worst performer in emerging markets, the lira has plunged some 12% this week alone, propelled by the central bank"s decision to cut its policy rate by 100 basis points to 15% despite inflation running near 20%. read more Thursday"s crash marked the biggest daily drop for the lira since Erdogan, a self-described enemy of interest rates, sacked former hawkish central bank chief Naci Agbal in March.Turkey"s central bank is seen as bowing to Erdogan"s calls for stimulus as it forges on with what analysts see as a reckless easing cycle given the lira"s meltdown and expected inflation pressure through mid-2022. The currency selloff stokes prices via imports. It sharpened dramatically as the central bank turned dovish in September and later began slashing rates by a total 400 basis points. Emre Cayirli, manager at ALB Forex research department, said the lira selloff could reach 11.5 on expectations of another cut in December and continue due to a strengthening dollar. "Inflation could continue to rise in relation to the increase caused by the rise in the exchange rate, a potential rise in demand in the economy and higher import prices," he said, citing a 2.19% uptick in loans since the October rate cuts. State banks followed the central bank"s lead on Friday, lowering interest rates on loans by up to 100 basis points, state-owned Anadolu news agency reported.The soaring living costs and 65% lira depreciation in four years have eaten into Turks" earnings and hit Erdogan"s opinion polls ahead of elections no later than mid-2023. read more Opposition leaders have called for early polls to quickly redirect economic policy. Erdogan on Wednesday pledged to keep battling interest rates "to the end" to stoke exports, investment and jobs. The central bank said much of the price pressure was temporary and would persist through mid-2022, adding it has some room for another possible rate cut next month. The monetary easing leaves Turkey"s real yields sharply negative and runs against the grain of a world in which central banks are raising rates to head off global price rises. Economists had predicted last week that the central bank would cut rates but some later said the sharp lira slump could stay its hand. A jump in benchmark bond yields suggests the bank will be forced to reverse course in coming months. Goldman Sachs predicted it will hike rates in the second quarter of 2022 after another 100-basis-point cut next month. "The current policy mix is not sustainable (and) likely to quickly translate into inflation, rather than growth," analysts at the Wall Street bank said. They added that the lira depreciation is likely to keep inflation above 20% through mid-2022. The lira has lost as much as 39% this year after touching a high water mark of 6.9 in February.