Erdoğan insists interest rates cause inflation, cites his 'economics education'

Photo: AA

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President and Justice and Development Party (AKP) Chair Recep Tayyip Erdoğan has once again reiterated his assertion that higher interest rates cause higher inflation.

As Turkey fights for its "economic independence," it faces resistance and attacks from both inside and outside the country, the president told reporters on the plane during his return from Turkmenistan.

The Turkish lira's exchange rate against the US dollar and Euro has been sliding as the Central Bank cut the policy rates three months in a row. Since October, the lira has lost more than 30 percent in value.

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"An economically dependent country cannot implement its own policies," said Erdoğan. "When you break out of the established line, what you will encounter is blackmail. If you don't have the will to stand out against this, you'll be condemned to instability."

Asserting that the recent hike in the foreign exchange rates did not have an economical basis, they will solve the problems with investments, employment and production, Erdoğan said.

Citing his "economics education," the inflation rate will drop before the next parliamentary and presidential elections, which are due to take place in June 2023, the president said. The existence of Erdoğan's university diploma has long been questioned by many in Turkey.

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"The interest rate is the reason, it is not the result. The result is the inflation rate," he remarked. "Of course, some defend the exact opposite of this."

He will never compromise on this approach, Erdoğan added. (AS/VK)