The pound has lost around 30% over the past month in a massive selloff sparked by aggressive interest rate cuts that Erdogan sought but which opposition economists and politicians say are partly unwise. because of soaring inflation.
“God willing, we will stabilize all price and exchange rate fluctuations in no time,” Erdogan told an audience in the eastern town of Siirt.
“Tayyip Erdogan said low interest rates yesterday, said low interest rates today and will say low interest rates tomorrow,” the president said. “I will never compromise on this because interest rates are a disease that makes the rich richer and the poor poorer. “
The currency touched a record intraday low of 14 per dollar on Tuesday and posted a record close on Friday at 13.7485. It is by far the worst performing currency in emerging markets this year after losing 45% of its value.
Inflation hit a three-year high of 21.3% last month, leaving Turkey’s real rates deeply negative, a wake-up call for fleeing investors and Turkish savers who have flocked to currencies strong to protect their wealth.
Despite opposition calls for early elections and a policy reversal, Erdogan has reiterated in recent weeks that rate cuts are needed to boost exports, credit, jobs and economic growth.
Under pressure from the president, the central bank cut its policy rate by 400 basis points to 15% and is expected to ease policy again this month.
“We will always be there for producers and employers with low interest rates. We are starting to apply precautions protecting workers against inflation, ”Erdogan said.
He said nonspecific foreign players, as well as “greedy” companies stocking more goods than needed, are partly to blame for some price spikes.
At a separate event in the southern town of Mersin, where crowds called for Erdogan’s resignation, CHP main opposition leader Kemal Kilicdaroglu said a new government would cancel all interest on loans held by farmers and small businesses.
“He doesn’t need to resign, we’ll kick him out anyway,” he said of elections scheduled for mid-2023 at the latest.