Turkish gov’t working on plan to lower interest rates: Sources

Neşe Karanfil/ Turan Yılmaz - ANKARA

The government is working on a scheme to lower interest rates by reducing the Treasury’s borrowing requirement, and the new model is expected to be announced by President Recep Tayyip Erdoğan “within 15 days,” according to sources close to the matter. 

Top members of the country’s economic administration have reportedly been holding meetings since April 2 on the issue.

One of the key targets of the plan will be measures to both lower interest rates and attract investments, sources said, adding that this would help the Treasury realize lower costs.

Erdoğan is known as an enemy of high interest rates and has repeatedly warned banks to lower rates, controversially arguing that high rates are the cause of inflation.

“The interest rate is both the mother and the father of inflation,” Erdoğan said most recently during a speech on March 31.

“Anyone attempting to act against this will find me against them. Interest rates are the main reason behind all evils in the economy,” he added.

Erdoğan also accused “financial institutions” of “lobbying for higher rates.”

“State-run banks are not an exception. We need to solve this problem and we will do so sooner or later,” he added.