Erdogan pledges support for higher interest rates

Sep 6, 2023 | Entertainment, News


Turkish President Recep Tayyip Erdogan has reversed his unorthodox economic approach
Turkish President Recep Tayyip Erdogan has reversed his unorthodox economic approach.
Photo: Ludovic MARIN / AFP
Source: AFP

Turkish President Recep Tayyip Erdogan on Wednesday confirmed a major policy reversal by backing his new economic team’s decision to drastically hike interest rates to fight runaway inflation.

Erdogan has been a lifelong opponent of high borrowing costs and pushed past central bank governors to fight inflation with lower interest rates.

Conventional economics says high interest rates help bring down prices by tamping down demand and raising the cost of doing business.

Analysts believe that Erdogan’s past policies helped spark a currency crisis that saw annual inflation hit 85 percent last year.

But he appointed a handful of Wall Street-trained veterans to steer the economy after nearly losing a May election because of Turkey’s dire economic malaise.

The central bank has since roughly trippled its policy rate to 25 percent.

PAY ATTENTION: Share your outstanding story with our editors! Please reach us through [email protected]!

Analysts believe it will need to raise the rate much higher at the next meeting on September 21 because the inflation has shot back up to nearly 60 percent.

Erdogan signalled clearly on Wednesday that he now supports higher interest rates.

“We will reduce inflation to single digits with the support of tight monetary policy,” he said in a nationally televised address announcing Turkey’s new medium-term economic programme.

“We have no doubt about achieving our goals.”

Some analysts felt that the central bank was refraining from raising its key rate faster out of fear of drawing Erdogan’s wrath.

Erdogan sparked a brief market panic by firing one central banker who tried to raise interest rates in late 2020 and early 2021.

He dismissed two others before then for fighting his unorthodox approach.

Source: AFP





Source link

Recent Post

Delta State Commissioner Caught With Guns? Fact Emerges

Delta State Commissioner Caught With Guns? Fact Emerges

Claims have emerged that Delta state commissioner for youth development, Agbateyiniro Weyinmi, was found in possession of a sack containing gunsLegit.ng reports that those circulating the claim insinuated that Weyinmi is a killer and cult memberA fact-checking...

Recent Event Post

Body Doubling for Beginners: The ADHD edition (free event)

Body Doubling for Beginners: The ADHD edition (free event)

Body Doubling for Beginners: The ADHD edition (free event) Get the ultimate 'cheat code' for focus… Experience the power of virtual body doubling to level up your focus and make your ADHD work for you, not against you.  Block out distraction and turn your focus onto a...

Post you may also like

Delta State Commissioner Caught With Guns? Fact Emerges

Delta State Commissioner Caught With Guns? Fact Emerges

Claims have emerged that Delta state commissioner for youth development, Agbateyiniro Weyinmi, was found in possession of a sack containing gunsLegit.ng reports that those circulating the claim insinuated that Weyinmi is a killer and cult memberA fact-checking...

Pin It on Pinterest

Share This
Open chat
1
Scan the code
EventsChronicles
Hello 👋
How can we help you?