Erdogan accepts steps new Finance Minister will take but maintains view on interest rates

Turkish President, Tayyip Erdogan, said his newly appointed Finance Minister, Mehmet Simsek, will take unspecified steps swiftly with the Central Bank, but that it was a mistake to suggest Erdogan had changed his own views on interest rates, Reuters reports.

Since winning re-election last month, Erdogan, a self-proclaimed “enemy” of interest rates, has appointed Simsek as well as a new Central Bank Governor, Hafize Gaye Erkan, in moves seen as heralding a switch to a tighter interest rate policy.

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“Some of our friends should not be mistaken, such as (asking) ‘Is our President going for a serious change in interest rate policies?'” Erdogan told reporters on a return flight from Azerbaijan on Tuesday, according to a readout of his comments published by Turkish media on Wednesday.

“But upon the thinking of our Treasury and Finance Minister, we have accepted that he will take steps swiftly, comfortably with the Central Bank,” Erdogan said.

Erdogan said he is determined to lower inflation, which dropped to just below 40 per cent in May, to single digits, adding that he maintains his “low inflation, low interest rate” policy.

Erdogan said he told the new Central Bank Governor about his expectations.

“God willing, neither our Finance Minister nor our Central Bank Governor will embarrass us and I think we will, hopefully, obtain positive results.”

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