Erdogan says interest rates will be lowered and inflation will fall too

President Tayyip Erdogan repeated his unorthodox economic policy on Saturday, saying interest rates would be lowered further and inflation would fall as a result, days before inflation data for January is announced, adding Turkey’s economic woes would pass.

Embroiled in a currency crisis fuelled by the central bank’s move to slash rates by 500 basis points since September as part of an economic model engineered by Erdogan, Turkey saw December inflation soar to its highest level in Erdogan’s 19-year rule.

A Reuters poll on Friday showed it is expected to hit a near 20-year high of 47 per cent in January.

“You know of my battle with interest rates. We are lowering interest rates and we will lower them. Know that inflation will fall too then, it will fall more,” Erdogan told supporters in the Black Sea province of Giresun.

“Exchange rate will stabilise and inflation will fall, prices will fall too, all of these are temporary.”