Turkish President and the ruling AKP chair Recep Tayyip Erdoğan announced that interest rates would be decreased to single-digit level even before waiting for the decision of the Central Bank of Turkey.
Stating that he could not accept the approach of the Governor of the Central Bank on the issue of interest rates, Turkish President said that Murat Çetinkaya, the Former Governor of the Central Bank dismissed by Erdoğan last week, should have obeyed his demand to decrease the interest rate.
"You will follow any decision made. The President has the authority to intervene in these matters in the new system of government. That’s why we believed that it was necessary to change our friend who did not follow our instructions regarding the interest rates ─ the mother of all evil," Turkish President Recep Tayyip Erdoğan continued.
Claiming that all moneylenders began to support the dismissed governor of Central Bank and criticize the President’s decision, Erdoğan also noted: "You will see how our interest rate policy is shaped soon. We have to drop interest rates to single-digit levels, and we’ll overcome it."
Simone Kaslowski, the chair of the Turkish Industry and Business Association (TÜSİAD), Turkey’s top capitalist organization, made statements after President Erdoğan sacked the Turkish central bank governor amidst tensions over interest rates, stating that it is up to the central bank’s administration whether to reduce interest rates.
On July 6, Murat Çetinkaya was dismissed in a presidential decree, and Murat Uysal, the Deputy Governor of the Central Bank, was appointed instead of him. Turkish President, with his recent statements, publicly expressed for the first time that Çetinkaya was fired over the disagreements on the interest rate.
The Central Bank of Turkey had hiked the interest rates to 24% last year to save tumbling currency against the US dollar and to restrain soaring double-digit inflation. As the interest rate determined by the Central Bank has remained steady since September 2018, the Turkish lira depreciated 50% against U.S. dollar between 2018-2019.
The Central Bank of Turkey will announce its decision regarding interest rates after the meeting to be held on July 25, 2019.