ANKARA (Dispatches) – Turkey will never leave its political and economic future to the “prescriptions” of global economic institutions like the IMF, the country’s president vowed on Wednesday, Anadolu News Agency reports.
“Turkey will never again submit its political and economic future to the prescriptions of global economic tutelage institutions, such as the IMF and similar institutions,” Recep Tayyip Erdogan told his Justice and Development (AK) Party’s, parliamentary group.
Ruling out an economic policy based on high interest and low exchange rates, which he called a system of exploitation that would never return to Turkey, Erdogan said: “Our aim is to build an economic structure that will produce more, earn more, and transfer what it gains to areas that will benefit the whole nation and increase welfare and hope.”
Recent jumps in inflation and losses in the value of the Turkish currency, the lira, have led opposition parties to attack the government’s economic policy, including interest rate cuts.
Erdogan has said the rate cuts were part of his “new economic model” and a “war of economic liberation” for Turkey.
“Interest rates are the reason, inflation is the result,” Erdogan has argued repeatedly, pledging that his policies will lead to high growth and broad-based prosperity.
The Turkish President urged calm among the public, asking them “not to stray from common sense” when buying foreign currency, setting prices and shopping.
Erdogan also promised additional measures to help low-income citizens “whose purchasing power has decreased.”
Turkey’s Central Bank intervened to help the flailing lira.
After years of pressure from Erdogan and three governors, the Central Bank said it “directly” intervened on Tuesday night by “selling transactions due to unhealthy price formations in exchange rates”.
It added that it had “started to conduct transactions at Borsa Istanbul Derivates Market due to unhealthy price formations in exchange rates”.
The intervention came moments before Erdogan spoke to state broadcaster TRT on Tuesday night, where he defended his view that high interest rates cause high inflation.
The lira slumped even further, to 14 lira to the dollar, as the president defended his policy on air.