By Justin Mays
Speaking after the cabinet meeting on Monday, 22 November, President Recep Tayyip Erdogan highlighted that Turkey will succeed in its “economic war of independence”.
The President indicated that a tight interest rate policy will not lower inflation in the country and he said that he preferred a competitive exchange rate as it brings employment and higher investment. “I reject policies that will contract our country, weaken it, condemn our people to unemployment, hunger, and poverty”, he added.
Erdogan indicated that he believes in a government that is focused on investment, production, employment, and exports instead of high-interest rates-low exchange rates.
Last week the country’s central bank cut its policy rate by 100 basis points to 15% and signaled more easing would come before the end of the year. The Central Bank of the Republic of Turkey (CBRT) has slashed rates by 400 basis points since September.
The President blamed the weakness of the lira on games he said were being played on foreign exchange and interest rates. “We see the games being played on the exchange rate and interest rates. We came out of every struggle we entered honorably by taking a strong stance. With the help of Allah and the support of our nation, we still emerge from this economic war of independence with victory” he said.
Erdogan is of the view that lowering interest rates is the only way to curb inflation. He has called for stimulus to boost exports, investment, and jobs. The cut drove up the value of the dollar against the lira. The lira traded at 11.40 to the greenback at 5 p.m. GMT.
The official data indicated that inflation has been driven by services, food, housing, and transportation prices reflecting in part soaring world energy prices. The central bank indicated that inflation in the country is temporary through likely to last through mid-2022.
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