Erdoğan insists on interest rate cuts, says he studied economics

President Erdoğan has insisted that there will not be turning back from the policy of low interest rates despite soaring inflation, noting that he studied economics. "Inflation is the result, high interest rates are the cause," he said.

Monday November 29 2021 02:00 pm

Duvar English

President Recep Tayyip Erdoğan has once again reiterated his unconventional hypothesis that reducing interest rates will lead to lower inflation.

Speaking to reporters on his flight back from Turkmenistan, Erdoğan said that he studied economics and that he will never give up on his stance against high interest rates.

"Inflation is the result, high interest rates are the cause," Erdoğan said, local media reported on Nov. 29.

"I've been defending this thesis since we came to power and will continue to do so. Tayyip Erdoğan does not have zigzags. Considering that I've studied economics and a certain set of values, high interest rates are not the result," he also said.

The lira plunged to record lows last week after Erdoğan pledged to stick with a policy of easing interest rates. It has lost as much as 45% of its value this year, with about half of those losses in the last two weeks.

The currency fell as far as 13.45 to the dollar in a historic 15% selloff on Nov. 23 that followed a speech in which Erdoğan defended the central bank's move to slash its policy rate to 15%, despite inflation of 20%.

Erdoğan on Nov. 29 gave the United States and Israel as examples to prove his point.

"When we take a look at these countries, our thesis' correctness can be seen," he said.

"I have never advocated for increasing interest rates and will never do so. Even though there are those thinking differently, Tayyip Erdoğan remains at the same point. I will never make concessions on this issue," the president added.

During the interview, Erdoğan claimed that inflation will decrease prior to the elections, which are scheduled to be held in 2023.

"We will succeed," he said.

According to Erdoğan, the ruling Justice and Development Party (AKP) has been putting forward a struggle for economic independence and this led to "attacks" on the Turkish economy.

"We will continue to work for our goals without paying attention to doomsayers and mandatary economists," Erdoğan said.