Erdoğan says interest rate cut not enough, promises more

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Turkish President and leader of Turkey's ruling Justice and Development (AK) Party Recep Tayyip Erdogan speaks during his party's parliamentary group meeting at the Grand National Assembly of Turkey in Ankara, Turkey on October 23, 2018. AFP PHOTOS

Turkish President Recep Tayyip Erdoğan has said an interest rate cut of 425 basis points by the country’s central bank on Thursday is not enough and that there will be more by year-end, Turkish media reports said.

The central bank sharply cut its key interest rate by a more-than-expected 425 basis points to 19.75 percent to spur a recession-hit economy, its first step away from the emergency stance it adopted during last year’s currency crisis,

Speaking at a meeting of his ruling Justice and Development Party (AKP) on Friday, Erdoğan said: “Did everything go crazy? No. The markets welcomed this. This was what should have happened, but even this is not enough.” He added that interest rate cuts would continue until the end of the year.

The bank lowered its benchmark one-week repo rate from 24 percent, where it had remained since September, when a collapse in the Turkish lira pushed inflation to a 15-year high above 25 percent, prompting aggressive rate hikes.

Erdoğan said inflation would fall as interest rates go down.

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