President Recep Tayyip Erdoğan vowed Sunday to rein in inflation decimating Turks’ purchasing power and doubled down on his opposition to high interest rates, Agence France-Presse reported.
Erdoğan has gone against orthodox economic thinking as part of a “war of economic independence,” arguing repeatedly that high rates push up inflation.
“Sooner or later, just as we lowered inflation to four percent when I came to power… we will reduce it again,” Erdoğan said after a Turkey-Africa summit ended Saturday.
“But I won’t let my citizens, my people, be crushed by interest rates,” the Turkish leader said in a meeting with African youths, according to a video released Sunday.
“God willing, inflation will fall as soon as possible.”
The last time consumer prices reached around four percent was in 2011, but inflation has steadily risen since 2017.
Under pressure from Erdoğan, the central bank has cut the main interest rate by 500 basis points since September.
The bank reduced the rate for a fourth time last week even though the annual inflation rate reached 21.31 percent in November, with experts predicting another rise this month.
The Turkish leader said “nothing else but” cutting rates should be expected in the speech in İstanbul later Sunday.
He also claimed Turkey was coming under “absurd attacks,” and launched a verbal assault on the influential Industrialists’ and Businessman’s Association (TÜSİAD).
TÜSİAD angered Erdoğan after calling Saturday on the government to abandon current economic policies and a return to the “rules of economic science.”
Erdoğan has sought lower interest rates to stimulate growth and production and boost exports.
But the Turkish lira has taken a battering, losing nearly 40 percent in value against the dollar since the start of November, with fears of a further devaluation.
The currency crisis has pushed many Turks below the official poverty line, and hundreds took to the streets in protests against the government’s monetary policy in Ankara and İstanbul at the weekend.
But Erdoğan pointed to a historic 50-percent increase approved last week for the minimum wage next year.
There have been concerns that Turkey would need to bring in capital controls after the lira’s plunge, but Erdoğan dismissed the speculation as “rubbish.”
“The Turkish economy will continue on its path in accordance with the rules of a free market economy, as it has done so far,” he said.