Erdogan says inflation targets unattainable with high interest rates

FILE PHOTO: Turkish President Tayyip Erdogan attends a ceremony marking the formal launch of the TurkStream pipeline which will carry Russian natural gas to southern Europe through Turkey, in Istanbul, Turkey, January 8, 2020. REUTERS/Umit Bektas

ANKARA (Reuters) – President Tayyip Erdogan said on Monday he believed it was impossible for Turkey to attain its inflation targets with high interest rates, days after the central bank committed to tight monetary policy.

Last week, the central bank said it was too early to ease policy and stood by a forecast that inflation of near 15% would drop below 10% by year-end. Erdogan, a self-described foe of interest rates, has repeatedly called for lower borrowing costs, rattling investors in the past.

Speaking after a cabinet meeting in Ankara, Erdogan said he believed employment and investments would increase if interest rates were lowered, adding investors would not put money into Turkey with high rates.

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