Financial and business news from Bulgaria

Erdogan wants rates reduced to single digit

Turkish President Recep Tayyip Erdogan, who is an avowed opponent of high interest rates, said today he wishes to see them reduced to a “single digit number” amid the current 19 percent, AFP reported.
“God forbid, we will reduce interest rates to a single digit number,” Erdogan said, speaking to his party's parliamentary group, BTA reports.

"We are determined,” he added.

Turkey's Central Bank raised its key interest rate from 17 percent to 19 percent on March 18th.

A few days after that promotion, Erdogan sacked Central Bank Governor Naji Agbal, a respected former finance minister who had been appointed to the post just five months earlier.

Erdogan, who is a supporter of strong growth stimulated by lucrative loans, has always spoken out against high interest rates.

He argues, contrary to classical economic theories, that high interest rates contribute to inflation.

Agbal was replaced by Shahap Kavcjuoglu, economist and former ruling party MP. This appointment worries investors and casts doubt on the future independence of the Central Bank.

The new governor is committed to taking the necessary measures to combat inflation.