ANKARA (Xinhua) – Turkey will continue to lower interest rates rather than increasing them, President Recep Tayyip Erdogan says, amid growing concerns about a surge in the country’s inflation to a 24-year high.
Defending his government’s easing monetary policy, Erdogan told reporters after a cabinet meeting that the government is implementing its own “genuine” economic program.
Turkey is an “independent” country that can determine and implement its own political and security priorities, and a “strong” country that can implement its own economic and social programs, he said.
“Those who benefit from the exchange rate, interest and inflation triangle do not understand our country’s growth strategy through investment, employment, production and current account surplus,” the Turkish leader noted.
Instead of inflation, Erdogan referred to cost of living as the “actual problem.”
“Is inflation a problem? Yes, it is a problem. But is this title alone the main cause of Turkey’s problems? If it were, our country would have solved all the problems thanks to the anti-inflation programs implemented countless times in the past,” he explained.
The Turkish lira fell to 16.59 against the U.S. dollar on Monday after the remarks by Erdogan, bringing its losses of value to more than 20 percent this year.
The lira shed more than 40 percent of its value in 2021, as the Turkish central bank slashed its policy rate by 500 basis points to 14 percent in December from 19 percent in September despite high inflation, and has kept the same rate since then.
Erdogan is an advocate of low-interest rates, insisting that the move will ease the burden on investments amid rising inflation.
Turkey’s annual inflation surged to 73.5 percent in May, the highest since October 1998.