Erdogan says Türkiye won’t raise rates in face of soaring inflation

Turkish President Recep Tayyip Erdogan
Turkish President Recep Tayyip Erdogan speaks during a press conference following the Cabinet meeting at the Presidential Complex in Ankara on June 6, 2022. (Photo: AFP)
ISTANBUL  — Turkish President Recep Tayyip Erdogan insisted on Monday that his government was opposed to higher interest rates even as inflation in the country soars to its highest level in nearly 25 years.اضافة اعلان

“This government will not hike interest rates. On the contrary, it will reduce them,” Erdogan said in a televised address after a weekly Cabinet meeting.

The Turkish central bank, which is nominally independent, holds its next policy-setting meeting on June 23.

But Erdogan’s comments came after official data showed that inflation in Türkiye hit 73.5 percent in May, the highest level since 1998.

Contrary to economic orthodoxy, Erdogan is convinced that high interest rates fuel inflation rather than rein it in.

The Turkish economy has gone into a tailspin since last year when Erdogan — who is up for re-election next year — put pressure on the central bank to start slashing interest rates.

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