ISTANBUL – Turkish President Tayyip Erdogan said he will never defend interest rate hikes and “will never compromise on this”, broadcaster NTV reported on Monday, in his latest defence of recent rate cuts which have triggered a lira slide.
He was quoted as telling reporters on his flight back from a visit to Turkmenistan that recent exchange rate volatility was not based on economic fundamentals and that Ankara was ready to provide necessary support to boost investments, namely through state banks.
NTV also reported him as saying he had not changed his unorthodox view that interest rates cause inflation, adding that he expected inflation to fall before elections scheduled for 2023.
The lira has tumbled as much as 45% against the dollar this year, with much of those losses suffered after Erdogan stepped us his defence of monetary. The central bank has slashed its policy rate by 400 basis points since September despite annual inflation around 20%.