Turkish President Recep Tayyip Erdogan announced on Monday that he wanted to lower interest rates again as inflation in Turkey reached 73.5% year on year in May.
“Let no one expect that from us.
This government will not raise interest rates.
On the contrary, we will continue to lower them,” Erdogan said at a press conference following a meeting with his cabinet.
The Turkish president believes, contrary to traditional economic theories, that high interest rates promote inflation.
He had forced the central bank at the end of 2021 to lower its key rate from 19% to 14%, between September and December, causing the collapse of the national currency.
"We don't have an inflation problem"
Inflation in Turkey hit 73.5% year on year in May, the highest since December 1998, driven by rising energy and food prices, official data showed on Friday.
Inflation is at the heart of the debates in Turkey, one year before the presidential election, scheduled for June 2023, the opposition and many economists accusing the National Statistics Office (Tüik) of knowingly and largely underestimating its magnitude.
“We don't have an inflation problem.
But a problem of high cost of living, ”said the Turkish head of state.
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Turkey
Inflation
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Recep Tayyip Erdogan