Erdogan wants to lower interest rates further – lira gives way

Istanbul Turkish President Recep Tayyip Erdogan announces further interest rate cuts by the central bank despite inflation exceeding 70 percent. “This government will not raise interest rates. On the contrary, we will lower them further,” Erdogan said in a speech on Monday. The Turkish lira then fell temporarily by 0.2 percent to $16.60, its lowest level since December.

Consumer prices in Turkey rose in May at their highest rate in almost a quarter of a century. Goods and services cost an average of 73.5 percent more than a year earlier, according to the statistics office. This is the highest inflation rate since October 1998.

The slide in the lira was triggered by interest rate cuts by the central bank, which made the national currency less attractive to investors. Erdogan describes himself as an enemy of interest rates. He wants to boost the economy with low interest rates.

More: Highest value since 1998: Turkish inflation rate rises to 73.5 percent