News Column

Turkish PM Erdogan criticizes central bank over interest rates

June 3, 2014

ANKARA (CIHAN)- Turkish Prime Minister Recep Tayyip Erdogan, who has criticised the central bank for not cutting interest rates enough, said he did not accept Governor Erdem BasÇi's approach on rates and hoped the bank would act immediately to resolve the issue.

Speaking to reporters a day after BasÇi briefed the cabinet on central bank policy, Erdogan said the latest data showed that inflation was not falling.

"These are routine presentations but I do not find his approach concerning interest rates at all positive and I do not accept it," Erdogan said, asserting that high interest rates were the cause of high inflation. "I hope that new steps are taken immediately and this issue is resolved," he said.

Data on Tuesday showed Turkish inflation rose less than expected in May, but the annual increase stayed above the central bank's forecast for the end of the year, bolstering its case for keeping monetary policy tight.

The bank cut interest rates for the first time in a year last month, despite high inflation, after calls for a rate cut from Erdogan, who is eager to maintain economic growth ahead of an August presidential election and parliamentary polls in 2015.

Erdogan said the bank's 50-basis-point cut in its one-week repo rate, the main rate at which it funds the market, was not enough, renewing concern about political interference in monetary policy. (Cihan/Today's Zaman)



VAR of the Erdogan's statements



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Source: Cihan News Agency (Turkey)

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