Turkish President Tayyip Erdogan said that he would reduce inflation to 4% against the background of the highest inflation rate of 21% in the last three years due to the record fall of the Turkish lira.
“Sooner or later, we will reduce inflation again, just as we reduced it to 4% when I came to power. But I will not allow my people to buy interest rates. High-interest rates are the cause of inflation,” Erdogan said at a meeting with students from African countries studying in Turkey. Broadcast the on his Twitter.
According to him, the record fall of the lira is caused by “unjustified attacks” on the economy. “The limited rate cuts that we have carried out cannot be the reason for such a picture,” he said.
He also said that Turkey is waging a “war for economic independence,” and the authorities intend to decisively stop “the actions of forces trying to undermine the country’s economic stability through financial manipulation.”
The Turkish currency, trading 7.4 lira per dollar in January, has fallen in price by more than 55% year and has lost 37% of its value month.
On Friday, the Turkish lira fell by 9%, to another anti-record of 17.14 lira per dollar from the previous closing level of 15.66 lira per dollar. It happened after the central bank of Turkey decided on Thursday to reduce the discount rate to 14% from 15%. Earlier on Friday, the regulator also announced new direct currency interventions.
Erdogan has changed the head of the central bank three times since July 2019 and the finance minister twice since November 2021. Earlier, the leaders of Turkey’s main opposition parties accused Erdogan of economic incompetence and called for early elections. However, the Turkish leader rejected this call, saying that Turkey’s presidential and parliamentary elections will, as planned, be in June 2023.
Istanbul Stock Exchange again announced the suspension of work amid the Turkish lira and stocks collapse.
On Thursday, the central bank of Turkey decided to reduce the discount rate to 14% from 15%, which accelerated the fall of the Turkish lira, which again updated the anti-record on Monday. The Istanbul Stock Exchange on Friday already announced the suspension of trading due to a sharp drop in the main stock index.
“As of today, the system of suspension of trading has worked after the fall of the Istanbul Stock Exchange stock index by more than 5%. Transactions have on the market of all shares of our exchange,” the exchange said in a statement.
Turkish President Tayyip Erdogan favors reducing the discount rate, arguing that this will lower inflation. He has changed the central bank’s head three times since July 2019 and the finance minister twice since November 2021. Earlier, the leaders of Turkey’s main opposition parties accused Erdogan of economic incompetence and called for early elections. The Turkish leader rejected this call, saying that Turkey’s presidential and parliamentary elections will be as planned in June 2023.