Erdogan says he plans talks with lenders on cutting Turkish interest rates

By bne IntelliNews October 16, 2017

Turkey's President Recep Tayyip Erdogan said on October 13 that he plans to hold talks with both public and private lenders on how to lower interest rates.

He did not say, however, when those meetings might take place.

Erdogan reiterated his rather unconventional view that the main cause of inflation is high interest rates.

“When you lower interest rates then inflation will come down,” he said.

Turkey’s annual consumer price inflation accelerated from 10.68% in August to 11.2% in September.

Erdogan has been calling on local lenders to lower their interest rates to help government boost economic activity.

He in the past has also criticised banks for making huge profits on citizens’ money by charging high interest rates.

“Banks nearly doubled their profits–this is a disaster. It is our right to expect banks to reduce interest rates to reasonable levels and contribute to the country’s economic development,” Erdogan said in a speech he delivered in August.

The combined net income of Turkey's banks increased by 25% y/y to reach TRY33.3bn (€7.73bn) across January-August, banking sector watchdog BDDK reported on October 3.

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