Turkey will bring both interest rates and inflation down to the single digits, President Recep Tayyip Erdogan said a week before the central bank holds its first rate-setting meeting with a new governor whose surprise March appointment unnerved investors.
Erdogan has long railed against high interest rates, which he says causes inflation contrary to mainstream economic theory, and has changed the central bank chief three times in less than two years. He fired Naci Agbal last month two days after he raised rates to 19 per cent to tame inflation running at 16 per cent.
“We will succeed in bringing inflation, which has shown a little increase recently, back to the single digits,” Erdogan told lawmakers from his ruling party on Wednesday. “We are determined to lower interest rates to the single digits.”
Erdogan has not offered a reason for sacking Agbal, who took the job in November when the lira had sunk to record lows and promised a more orthodox monetary policy to boost investor confidence. Sahap Kavcioglu, an academic and newspaper columnist, who has written in support of Erdogan’s unconventional view about the link between interest and inflation succeeded Agbal.
However, Kavcioglu has indicated he won’t immediately undo Agbal’s policies at the next monetary policy committee meeting on April 15. He has also pledged to meet the central bank’s year-end inflation target of 5 per cent.
The shakeup at the central bank unnerved foreign investors, who dumped $1.9bn of Turkish stocks and bonds in a single week. But Erdogan said Turkey’s economy “has achieved a large degree of resilience against shocks” and was now seeing strong demand for tourists, despite the coronavirus pandemic.
Turkey recorded 49,584 new coronavirus cases on Tuesday, the biggest daily increase of the pandemic. The country has fully vaccinated 7.4m people, or about 9 per cent of its population.
土耳其總統雷杰普-塔伊普-埃爾多安(Recep Tayyip Erdogan)在央行舉行首次定息會議前一周表示，土耳其將把利率和通脹率都降到個位數，新行長3月份的意外任命令投資者感到不安。