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Erdogan's interest rate agenda

Turkish Prime Minister Recep Tayyip Erdogan's pressure on the Central Bank governor to lower the interest rate is a mix of populism and ideology.
Turkey's Prime Minister Tayyip Erdogan addresses his supporters during a meeting of his ruling AK Party (AKP) in Ankara January 24, 2014. Turkey received a vote of confidence in its underlying economic health on Thursday, with foreign investors lapping up a $2.5 billion eurobond issue even as a corruption scandal swirled and the central bank intervened to prop up the lira. The graft investigation, one of the biggest threats to Erdogan's 11-year rule, has shaken Turkey in recent weeks, helping send the lira
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After the March 30 local elections, Turkish Prime Minister Recep Tayyip Erdogan began applying suffocating pressure on Erdem Basci, the governor of Turkey’s Central Bank, to lower the interest rates he deemed as too high.

The frequent calls to “lower the interest rate” by Erdogan in his usual abrasive manner, in a language tantamount to scolding, are threatening the presumed independence of the Central Bank and denting the international prestige of the institution.

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