Turkish Central Bank should 'immediately' cut interest rates, says minister

ISTANBUL - Reuters

Economy Minister Nihat Zeybekci. AA Photo

The Turkish Central Bank should immediately cut interest rates, Economy Minister Nihat Zeybekci said on Jan. 13, citing the country’s inflation target of 5 percent this year.

A vocal critic of the Central Bank’s policies, Zeybekci told broadcaster A Haber in an interview that rates could be cut to as low as 6 percent. The bank’s one-week repo rate currently stands at 8.25 percent.

The Central Bank left its main interest rates unchanged on Dec. 24, 2014, opting to keep policy tight as it awaits a sustained improvement in inflation expectations.

Those expectations have come down due to falls in oil and commodity prices, but only one of 18 economists in a Reuters poll had expected the bank to cut key rates.

Zeybekci also said Turkey could grow higher than expected in 2015 on the back of higher exports and domestic demand. The government’s medium-term program forecasts 2015 growth of 4 percent.