Operating system based on high interest rates and low exchange rates will not return to Turkey, President said
Turkey will never leave its political and economic future to the “prescriptions” of world economic institutions like the IMF, the country’s president promised on Wednesday.
“Turkey will never again submit its political and economic future to the prescriptions of the institutions of world economic supervision, such as the IMF and similar institutions,” Recep Tayyip Erdogan told the parliamentary group of his Justice and Development (AK) party.
Excluding an economic policy based on high interest rates and low exchange rates, which he called an operating system that would never return to Turkey, Erdogan said: “Our aim is to build an economic structure that will produce more, earn more, and transfer what he earns into areas that will benefit the nation as a whole and increase welfare and hope. “
Recent surges in inflation and the depreciation of the Turkish currency, the pound, have led opposition parties to attack the government’s economic policies, including interest rate cuts.
Erdogan said the rate cuts were part of his “new economic model” and an “economic liberation war” for Turkey.
“Interest rates are the reason, inflation is the result,” Erdogan has repeatedly asserted, promising that his policies will lead to high growth and widespread prosperity.
The Turkish president appealed to the public for calm, asking them “not to deviate from common sense” when buying currency, setting prices and buying.
Erdogan also pledged additional measures to help low-income citizens “whose purchasing power has declined”.
In an intervention by the Central Bank of Turkey earlier Wednesday, Erdogan stressed the authority of the bank to take such measures because it is governed by its own law.
“It has such a right when such a thing is necessary. The Central Bank makes such interventions and has the right to do so,” he said.
The Central Bank of Turkey said on Wednesday that it had intervened in the market via sell transactions due to “unhealthy” price formations in exchange rates, according to a statement from the bank.
The announcement came against a backdrop of fluctuating exchange rates.
Following this move, the Turkish lira gained 6.27% against the US dollar, hitting 12.65 after a historic low of 14.05
The Central Bank carried out its last direct foreign exchange intervention in January 2014 with a sale of $ 3.15 billion.