Turkish president slams high interest rates

President Erdogan 'uncomfortable' with high interest rates, seeks 'reasonable' levels from lenders

Turkish president slams high interest rates

World Bulletin / News Desk

President Recep Tayyip Erdogan said Wednesday people in Turkey paid some of the world's highest interest rates, something which had to change in order to achieve high growth.

"Turkey's real interest rate is among the highest in the world. That makes me very uncomfortable... We need to change that," he told the signing ceremony of a strategic cooperation agreement between Turkey's Borsa Istanbul and the Islamic Development Bank Group (IDB).

He said the overnight interest rate reached 7,500 percent after Turkey’s economic crisis of 2001.

"Some years tax revenues could not cover the interest payment," he added.

Erdogan recalled how Turkish lenders reduced interest rates in order to boost growth as the country needed to grow above five percent in order to provide employment to working-age citizens.

The Turkish Central Bank's board will meet Thursday to make a decision whether to change interest rates.

"I am calling on lenders: please reduce interest rates to reasonable levels. Look at unemployment in the country. If we want growth, we need employment, investment and competition. Unemployment is above 11 percent; is this what this country deserves?" he said.

The Turkish leader suggested adopting the gold standard to combat international pressures.

Erdogan also said he had no words on the central bank's independence but said that “as a politician” he had a responsibility to the public who were being hurt by high rates.

On Oct. 20, the country's central bank held key interest rates at their current levels after reducing its main interest rate over the last seven months.

The one-week repo rate would be kept at 7.50 percent while the borrowing rate would remain at 7.25 percent, in line with expectations, the body said. The overnight lending rate would stay at 8.25 percent.

Last Mod: 24 Kasım 2016, 00:22
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