Turkey to break economic triangle of evil with reforms: Erdoğan

Reuters

Turkey will bring in structural reforms to break the "triangle of evil" of interest rates, inflation and exchange rates, President Recep Tayyip Erdoğan said on Dec. 27, adding Ankara was determined to form a system based on production and employment.

Erdoğan promised a slate of judicial and economic reforms last month, leading to expectations of the possible release of politicians, including Kurdish ones, and human rights advocates from jail. But Erdoğan's recent comments on court rulings and criticism aimed at his government have fuelled skepticism about his pledge.

Speaking via videolink at a ceremony in Ankara, Erdoğan said 2021 would be "the year of democratic and economic reforms" and that efforts to present the reforms to parliament would move "as soon as possible."

"We hope to overcome troubles from economic attacks and the pandemic measures as soon as possible. By speeding up structural reforms, we are determined to form a system based on production and employment and breaking the interest rates, inflation and exchange rates triangle of evil," Erdoğan said.

"We are not carrying out democratic reforms because anyone forced us to, but because our people deserve them," he added.

Erdoğan has called interest rates the "mother of all evil" and says he believes high rates stoke inflation - counter to monetary theory. He has often characterized Turkey's economic woes as the result of foreign attacks on the economy.

Turkey's Central Bank hiked interest rates by 200 basis points to 17% on Dec. 24, seeking to cool double-digit inflation and bolster its credibility under new governor Naci Ağbal.

Turkey has also faced criticism from rights groups and its Western allies for a widespread crackdown following an abortive coup in 2016, under which thousands of people from the military, public and private sector were detained, sacked or arrested.