He said it is the inflation, which is due to high interest rates, but not the other way around.
On Feb. 10, Erdogan criticized the work of the head of Turkey’s central bank, Erdem Basci.
Turkey’s central bank on Jan. 20 lowered its key interest rate (the weekly repo rate) by 0.5 percentage points to 7.75 percent, while the other two rates, that is one on deposits and the other one on overnight loans, were left at 7.5 and 11.25 percent respectively.
It was earlier reported that a prosecutor of a court in Ankara, Serif Aydin, filed a lawsuit against the head of Turkey’s central bank, Erdem Basci. The prosecutor accused Basci of serious material damage inflicted to Turkey’s citizens as a result of an erroneous interest rate policy of the central bank.
The prosecutor said that, in case of a trial, the Turkish central bank’s head can be imprisoned for up to two years.
Meanwhile, Turkey`s deputy prime minister for economic affairs, Ali Babacan, had said that the central bank pursues the right monetary policy.
Basci had said the central bank expects in 2015 the minimum level of inflation in Turkey over the past 45 years. He said it is expected that this year the consumer price index in Turkey will stand at 5.2 percent, and in 2016 – at five percent.
He said the country`s central bank will do everything possible to keep inflation under control.
The inflation rate in Turkey was 8.31 percent in 2014.
To keep the exchange rate of TRY at a stable level, Turkey’s Central Bank carried out intervention worth $2 billion throughout 2014 however, this attempt was unsuccessful.
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