Turkish President Recep Tayyip Erdoğan said on Wednesday that Turkey’s real interest rate is among the highest in the world and that it needs to be changed, targeting borrowing costs, on the eve of a central bank meeting.
Speaking during the signing ceremony of a cooperation agreement between Borsa Istanbul and the Islamic Development Bank on Wednesday in İstanbul, Erdoğan said the central bank was independent but that he reserved the right to criticize it.
Following Erdoğan’s comments, which were broadcast live on television, the lira sank to a record low of 3.4170 against the dollar.
“Since I took on the job of leading Turkey 14 years ago, I have only fallen short of making headway in a few areas that I desired. One of those is the cutting of interest rates,” he said.
“I have nothing against the independence of the central bank, but I cannot allow my people’s will and rights to be taken away with high interest rates,” he added.
Turkish growth is likely to miss government forecasts this year and next as uncertainty after a failed coup and an expected spring referendum on a constitutional amendment delay investment decisions, officials told Reuters last week.