Although the Turkish currency has fallen sharply, the Turkish President has promised to continue to implement a low interest rate policy.
Turkish President Recep Tayyip Erdogan (Recep Tayyip Erdogan) stated that he hopes that the volatile foreign exchange and inflation rate will stabilize in the short term, because after the lira currency fell sharply, he reiterated his opposition to high prices. The interest rate position.
Driven by Erdogan’s search for a sharp interest rate cut, the lira fell by about 30% last month, but economists and opposition politicians said this was partly due to soaring inflation and recklessness.
Erdogan said to the audience in the eastern city of Sirte: “God bless us, we will stabilize all fluctuations in prices and foreign exchange rates in the near future.”
“Tayip Erdogan said low interest rates yesterday, low interest rates today, and low interest rates tomorrow,” the president said. “I will never compromise on this issue, because interest rates are a chronic disease that makes the rich richer and the poor poorer.”
On Tuesday, the currency hit a record intraday low of 14 against the U.S. dollar and set a record close on Friday at 13.7485. After depreciating 45%, it is the worst performing currency in emerging markets this year.
The inflation rate jumped to a three-year high of 21.3% last month, making Turkey’s real interest rate seriously negative. This is a red flag for fleeing investors and Turkish depositors who have poured in hard currency to protect their wealth.
Although the opposition has called for early elections and policy reversals, Erdogan has reiterated in recent weeks that interest rate cuts are needed to promote exports, credit, employment and economic growth.
Under pressure from the President, the central bank has cut the policy interest rate by 400 basis points to 15%, and it is expected to ease the policy again this month.
“We will always serve producers and employers with low interest rates. We have begun to take preventive measures to protect workers from the effects of inflation,” Erdogan said.
He said that unspecific foreign actors and “greedy” companies hoarding more goods than needed are partly due to the sharp rise in prices.
At another event in the southern city of Mersin, the crowd called for Erdogan to resign. The leader of the main opposition Health Protection Center Kemal Kilidaroglu said that the new government will exempt farmers and small businesses from holding Some interest on all loans.
“He doesn’t need to resign, we will send him away anyway,” he said of the elections scheduled for mid-2023.