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.
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.
Of course, a higher cost will be the fortified impression that Turkey is on the verge of becoming a “command economy” amid the heavy pressure the Central Bank is under.
It is not a coincidence this offensive against the Central Bank was begun immediately after the March 30 local elections.
