Turkish minister criticizes Central Bank’s rates policy

ANKARA - Anadolu Agency

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Turkish Economy Minister Nihat Zeybekci on Feb. 6 took issue strongly with the remarks of the ex-governor of the Central Bank on interest rates.

The minister replied sharply to the ex-governor of the Central Bank of Turkey, Durmus Yıldız, who had told BBC Turkey on Feb. 3 that high interest rates are not the only reason for Turkey’s slow economic growth, which is the point of view of government officials.

 “To say that, if low rates were the main reason behind economic growth, Japan and other countries with low rates would see growth increase rapidly, is to approach an equation that has three to four unknowns with only one known,” Zeybekci said.

Japan, the U.S., the EU and Turkey each have a unique dynamic, Zeybekci said, so each of them should be evaluated in their own context.

“Workforce participation is now 51 percent in our country. When we consider the population growth rate and rising workforce participation together, it is clear Turkey should not see growth rates below 5 percent as a success,” Zeybekci said.

Zeybekci said Europeans aim to increase their competiveness and exports with the help of low rates and cheap local currency, while noting that the European Central Bank has held interest rates at almost zero levels for a long time.

Interest rates are controversial in Turkey, as government officials have repeatedly criticized the Central Bank’s tight monetary policies for limiting economic growth.