Turkey’s Erdogan will not change interest rate policy
ALBAWABA – Turkey’s President Recep Tayyip Erdogan announced his economic team will have more leeway in terms of policy, but reiterated that he – Turkey’s Erdogan – has not changed, and nor will his interest rate policy, Bloomberg reported.
“People shouldn’t be under the misconception that the president is moving toward a serious change in interest-rate policies,” he said. “I’m the same.”
The President’s announcement is seen by Bloomberg as a concession that at least slightly opens the door for a shift away from years of ‘unconventional measures that stoked an inflation crisis’.
“We have accepted our minister quickly and comfortably taking steps along with the central bank,” Erdogan told a group of reporters during a return trip from Azerbaijan on Tuesday.
“This way we’ve stated our determination to lower inflation to single digits.”
The lira reversed losses for the day and Turkish bank stocks soared after Erdogan’s remarks, as reported by Turkey’s Anadolu Agency.
These are Erdogan’s first public comments on monetary policy since installing Finance Minister Mehmet Simsek and central bank Governor Hafize Gaye Erkan.
Erdogan’s statements confirm that Turkey is likely poised to reshape the unorthodox economic policies which are reported to have caused an exodus of foreign investors. Economists and experts have also blamed Erdogan’s policies for the skyrocketing prices.
According to Bloomberg, Investors are on the lookout for a big rate hike at the central bank’s next meeting on June 22.
In the wake of Erdogan’s comments, the Turkish lira gained about 0.2 percent. Five-year credit default swaps dropped, while Turkey’s main banking stock index was up 3.4 percent.
