"Turkey's real interest rate is among the highest in the world. That makes me very uncomfortable... We need to change that," he told the signing ceremony of a strategic cooperation agreement between Turkey's Borsa Istanbul and the Islamic Development Bank Group (IDB).
He said the overnight interest rate reached 7,500 percent after Turkey’s economic crisis of 2001.
"Some years tax revenues could not cover the interest payment," he added.
Erdogan recalled how Turkish lenders reduced interest rates in order to boost growth as the country needed to grow above five percent in order to provide employment to working-age citizens.
The Turkish Central Bank's board will meet Thursday to make a decision whether to change interest rates.
"I am calling on lenders: please reduce interest rates to reasonable levels. Look at unemployment in the country. If we want growth, we need employment, investment and competition. Unemployment is above 11 percent; is this what this country deserves?" he said.
The Turkish leader suggested adopting the gold standard to combat international pressures.
Erdogan also said he had no words on the central bank's independence but said that “as a politician” he had a responsibility to the public who were being hurt by high rates.