Turkish PM not satisfied with ‘oppressively’ moderate interest rate cut

ISTANBUL

PM Erdoğan speaks at a fast-breaking iftar meal in Istanbul organized by the Independent Industrialists and Businessmen’s Association (MÜSİAD). AA Photo

Prime Minister Recep Tayyip Erdoğan has once again heavily criticized the Central Bank over its interest rate policies, saying high rates are “keeping foreign investors away from the country.”

“As a prime minister, I do not accept the interest rate policies of the Central Bank,” Erdoğan said in a speech at a fast-breaking iftar meal in Istanbul organized by the Independent Industrialists and Businessmen’s Association (MÜSİAD).

 “No entrepreneurs would get involved in investments in a country where rates are so high. Look, the rate policy in the U.S. is 1 percent; it is a minus figure in Japan; it is 1 percent in Israel. But your [Central Bank] policy is at around 8 or 9 percent, which goes up to 15-16 percent when commissions are considered. This is oppression,” he added

Erdoğan again suggested that “some forces abroad” are disturbed by the fact that Turkey is “growing in peace and the people are getting richer, instead of interest rate or gun lobbies.”

The Central Bank last week cut its benchmark rate to 8.75 from 9.5 percent, amid mounting pressure from the prime minister.

Denizbank General Manager Hakan Ates recently stated in an interview with daily Hurriyet that the independence of the Central Bank was crucial, but added that the Bank should still be careful about continued growth and the balance of payments.

“In today’s world the Central Bank should be independent, but it should also find a middle way with the government about growth and price sustainability,” Ates said, adding that the U.S. Federal Reserve and the European Central Bank also took measures for growth supp