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Erdogan Says Expects Turkish Interest Rates to Fall Further

Erdogan Says Expects Turkish Interest Rates to Fall Further

Saturday, 7 September, 2019 - 16:45
Turkish lira banknotes are seen in this picture illustration in Istanbul, Turkey August 14, 2018. (Reuters)

Turkish President Recep Tayyip Erdogan said on Saturday he expected the central bank to keep cutting interest rates, five days before its monetary policy board is due to meet.

The central bank slashed its key interest rate by 425 basis points to 19.75% last month, and Erdogan said the downward trend was likely to continue.

“The monetary policy board meets on Thursday. I believe interest rates will fall further,” said Erdogan, who often criticizes high interest rates, calling for lower borrowing costs to boost economic activity.

“As interest rates fall, inflation will downgrade too, you will see,” he said in a speech in the northwestern city of Eskisehir, according to Reuters.

Last year, Turkey’s central bank hiked its benchmark rate to 24% to stem a slump in the lira and a spike in inflation, which has since fallen from October’s 15-year high of more than 25%.

The lira lost nearly 30% of its value against the US dollar last year in what Erdogan portrayed as an economic war against Turkey.

“After the currency attacks last August, the balancing process we implemented continues successfully. We are back to the stage of strengthening our growth,” he said.

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