Turkey: the President's grip on the Central Bank's key rates

Turkish President Recep Tayyip Erdogan.

Ozan KOSE AFP / File

Text by: RFI Follow

1 min

Recep Tayyip Erdogan persists and signs.

On Monday, November 29, he again said he was opposed to any “compromise” concerning the level of key rates of the Central Bank of the Republic of Turkey.

And this, despite the tumble of the currency, the pound.

Since the start of the year, the latter has lost more than 40% of its value against the dollar.

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With our correspondent in Istanbul,

The Turkish president vehemently defends an economic theory that is heterodox to say the least: high interest rates would cause inflation, contrary to what the vast majority of economists claim.

Tayyip Erdogan's opinion would be of little importance if the officially independent Central Bank did not apply the Head of State's instructions to the letter.

In mid-November, the institution thus reduced its main key rate from 16% to 15% - its third drop in three months.

The current governor of the Central Bank of Turkey is the fourth in two and a half years.

“

 ,” the head of state said of a predecessor.

In recent weeks, every time Recep Tayyip Erdogan has repeated his intention to continue cutting rates, the Turkish lira has slipped, even losing 15% of its value in a matter of hours on November 23.

The president maintains that his policy promotes growth, encourages exports and decreases unemployment.

And that it will ultimately help fight inflation.

In the meantime, the latter is close to 20% over one year, hitting hard on tens of millions of Turks.

►Read also: In Turkey, the pound continues to fall, farmers toast

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• Turkey

• Recep Tayyip Erdogan

• Currencies

• Economy