The Turkish President believes that high interest rates lead to inflation.
(Photo: dpa)
Istanbul Before taking an important monetary policy decision by the Turkish central bank, President Recep Tayyip Erdogan once again spoke out clearly in favor of low interest rates and described interest rates as a “plague”. “We will take the interest rate plague off the shoulders of our people,” said Erdogan on Wednesday in front of the faction of his Islamic-conservative ruling party AKP in Ankara.
“We will definitely not allow interest rates to bring our people to their knees,” said the Turkish President. “As long as I am in this position, I will continue my fight against interest rates until the end. And I will also continue my fight against inflation. “
The Turkish national currency, the lira, has come under considerable pressure against the US dollar and the euro in recent months and has fallen to record lows in each case. You can now get more than ten lira for one dollar. On Wednesday, the Turkish currency fell again to a record low of 10.5651 lira against the dollar.
The situation is exacerbated by the loose monetary policy of the central bank, which recently lowered its key interest rate twice despite the rise in inflation. Another rate cut is expected at the central bank meeting on Thursday. According to the state news agency Anadolu, Erdogan emphasized after his group speech that the central bank made independent decisions.
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Critics, on the other hand, complain that the course is significantly influenced by Erdogan, who is considered a declared opponent of high interest rates. The Turkish President has repeatedly changed the top of the central bank.
Contrary to popular belief, Erdogan believes that high interest rates cause inflation instead of fighting it. Erdogan emphasized on Wednesday: “Interest is the cause, inflation is the result.” He could not work with proponents of high interest rates. Erdogan also complained that investors ran away despite interest rate cuts. “What kind of people are you?” He said.
More: Turkish central bank cuts key interest rate unexpectedly significantly – lira plummets