Interest rates

Erdogan pledges to fight inflation and higher interest rates

Turkish President Erdogan has said Ankara will not abandon free market principles and the country will not implement a controlled exchange rate regime.

Erdogan says claims that Turkiye may need an “economic state of emergency” are baseless. (Reuters)

Turkiye chairman Recep Tayyip Erdogan fired back at the critics, saying he would continue to support low interest rates while promising to keep inflation under control.

Ankara will not abandon free market principles and the country will not put in place a controlled exchange rate regime, Erdogan said at the Ilim Yayma Foundation Oscar ceremony held at Dolmabahce Palace in Istanbul.

“The Turkish economy will continue to gain momentum in accordance with the rules of the market economy, as it has done so far,” he said, adding that claims that Turkiye may need a “state of economic emergency” are incorrect.

“The economic policy implemented by our government is moving completely in the direction we have determined, with the exception of cyclical fluctuations in the exchange rate,” he said.

Erdogan said his government would continue to fight against rising interest rates. “Don’t expect anything else from me.”

Earlier, after the end of a Turkiye-Africa summit, Erdogan said “sooner or later, just as we lowered inflation to 4% when I took office … we will reduce it again”.

“But I will not let my citizens, my people, be crushed by interest rates,” the Turkish president said during a meeting with young Africans, according to a video released on Sunday.

“God willing, inflation will drop as soon as possible.

Lower the key rate

Turkiye’s central bank on Thursday cut its benchmark one-week pension rate by 100 basis points from 15% to 14%.

With the latest cut, the monetary authority has lowered the key rate by 500 basis points since September.

Although the Central Bank is an independent institution, its recent interest rate cuts are in line with Erdogan’s oft-stated opposition to higher interest rates, with the mantra: “We will remove the burden of interest rates. interest at the expense of our people. “

According to the latest data from the Turkish Institute of Statistics, Turkiye’s annual inflation rate was 21.31% in November.

Source: AA