Turkish President Recep Tayyip Erdogan on February 7 described interest rate policy in Turkey as "an instrument of exploitation" as he renewed calls for lenders to provide cheaper loans to boost economic activity.
Following his comments, the Turkish lira weakened by 0.5% from 3.7141 to the dollar to trade at 3.7333 as of around 1430 local time. After five minutes, however, it had recovered to 3.7259.
“I have a problem with the interest rate policy implemented in my country. In fact, this policy is an instrument of exploitation,” Erdogan said in a public speech in Ankara, urging the central bank and commercial lenders to lower their interest rates.
Erdogan also reiterated his unconventional view that high interest rates cause inflation.
Turkey’s annual consumer price inflation climbed to 9.22% in January, reflecting the impact of the weaker currency on the CPI.
The lira, which lost 17% of its value against the dollar last year, has fallen another 5% since the start of 2017.
Last month, the central bank raised its end-year inflation forecast for 2017 to 8% from its previous estimate of 7.5%.
The bank’s next rate-setting meeting is scheduled for March 16.
Don’t just follow the news—understand it.
The IntelliNews PRO service includes access to reports, exclusive market data, and more news that decision-makers care about. Stay ahead of the market with IntelliNews PRO.
Sign Up NowRelated Articles
Fintech Freedom Holding aims to make France key entry point into EU with €500mn investment
A French banking licence would open the way to a new phase in the international expansion of Nasdaq-listed fintech group Freedom Holding Corp. That’s the expectation of Freedom, a company ... more
Net income at Freedom Holding Corp more than doubles in fiscal 2026
Freedom Holding Corp (Nasdaq: FRHC) slightly more than doubled its net income to $153.3mn in its fiscal year to March 31 from from $76.2mn in the previous fiscal 12 months, the international ... more
Eurasian Development Bank redeems €286mn Eurobond
The Eurasian Development Bank (EDB) said on March 26 it had fully redeemed a five-year Eurobond, meeting all obligations to investors at maturity. The bank paid a total of €286mn, covering both ... more