Turkey’s Erdoğan says determined to see lower interest rates

Turkish President Recep Tayyip Erdoğan on Wednesday again appeared to wade into the Turkish central bank’s policies, saying he was “determined” to see interest rates return to single digits soon, Agence France-Presse reported.

Erdoğan’s comments in a nationally televised address came two weeks after he fired market-friendly central bank governor Naci Ağbal after only four months on the job.

Ağbal had hiked the main interest rate to 19 percent to help tame inflation, a policy that Erdoğan has long opposed.

The new central bank governor, Şahap Kavcıoğlu, is a former ruling party lawmaker who subscribes to Erdoğan’s unorthodox view that higher interest rates cause inflation instead of slowing it down.

Erdoğan said: “God willing, we will reduce interest rates to single digits and then further lower this number. We are determined.”

The powerful Turkish leader’s dislike of high interest rates is legend, and his pressure on the central bank to keep them low has been one of the main areas of concern for foreign investors.

Erdoğan once called high rates the “mother and father of all evil.”

Central bank administrators hold their next policy meeting on April 15.

In his address, Erdoğan also promised to “reduce inflation to single digits.”

Official data published on Monday showed annual inflation had climbed to 16.2 percent in March, putting more pressure on Kavcıoğlu.

The central bank targets annual inflation of 9.4 percent this year.