Erdogan says he hopes to stabilize Turkey’s volatile pound soon Business and Economic News

The Turkish president has promised to continue with the policy of low interest rates despite the decline in the Turkish currency.

Turkish President Recep Tayyip Erdogan has said he expects the currency and volatile inflation rates to stabilize soon, as he reiterated his stance against high interest rates as a result of a sharp fall in the lira currency.

The lira fell 30 percent in the last month in terms of sales driven by Erdogan’s aggressive interest rate cuts, but economists and opposition politicians said it was partly due to rising inflation.

“God willing, we will stabilize all fluctuations in prices and forex rates in the not-so-distant future,” Erdogan told listeners in the eastern city of Siirt.

“Tayyip Erdogan said low interest rates yesterday, low interest rates today and low interest rates tomorrow,” the president said. “I will never compromise on this because interest rates are a disease that makes the rich even richer and the poor even poorer.”

The currency hit a low of $ 14 a day on Tuesday and closed the record on Friday at 13.7485. It is the worst-hit currency in emerging markets this year, after deducting 45 percent of its value.

Inflation rose to 21.3 percent in the past three months, leaving Turkey’s real rates very negative, a red flag for Turkish savers who have fled investors and gone to hard currencies to protect their wealth.

Despite calls by the opposition to advance elections and overthrow politics, Erdogan has reiterated in recent weeks that rate cuts are necessary to boost exports, credit, employment and growth.

Under pressure from the President, the central bank has reduced its policy rate by 400 basis points to 15 per cent, and is expected to ease policy again this month.

“We will always be there for producers and entrepreneurs with low interest rates. We have begun to implement measures to protect workers from inflation, “Erdogan said.

He said specific foreign agents, as well as “stingy” businesses that accumulate more goods than they need, are partly to blame for some sharp price increases.

At another event in the southern city of Mersin, where the crowd demanded Erdogan’s resignation, CHP chief opposition leader Kemal Kilicdaroglu said a new government would forgive all interest on loans from farmers and small businesses.

“He doesn’t have to resign, we will send him anyway,” he said of the elections scheduled for no later than mid-2023.