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Turkey’s Erdogan wades again into central bank policy, looks to see lower rates

Published: Updated:

President Recep Tayyip Erdogan 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.

Erdogan’s comments in a nationally televised address came two weeks after he fired market-friendly central banker Naci Agbal after only four months on job.

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

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The new central banker, Sahap Kavcioglu, is a former ruling party lawmaker who subscribes to Erdogan’s unorthodox view that higher interest rates cause inflation instead of slowing it down.

Erdogan 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 interests 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.

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

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

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

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

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

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