Turkish President Recep Tayyip Erdogan has stated that his country needs to cut interest rates, and that he has spoken to the central bank governor on the issue, which has sent the lira down to new record lows against the dollar.
This came at a time when Erdogan said that he will bleed new news next Friday about oil and gas discoveries, and that his country is open to foreign companies for investment. Read also The highest since mid-2019… Inflation in Turkey exceeds 16%7 questions that explain the story of Canal Istanbul and its economic importance Reuters: The Turkish lira is falling against the dollar after the central bank fixes the interest rate Saudi imports from Turkey increased in February
“I spoke to the central bank governor today, we definitely need to lower interest rates,” Erdogan said in an interview with TRT (Turkish state TV) news channel late on Tuesday night.
“For that we need to see interest rates start to fall in the next July and August,” he added, adding that this would raise the burden on investments, according to what Reuters quoted.
Comments by Erdogan, who describes himself as the “enemy of interest rates”, sent the lira, already under pressure last week, to new record lows against the dollar.
On Wednesday, the Turkish currency fell more than 4% to a record low of 8.88 lira against the dollar after Erdogan’s comments.
But the Turkish lira reduced its losses to 1% to the level of 8.62 lira per dollar at 9:14 am local time.
Contrary to conventional ideas, Erdogan favors lowering interest rates to curb inflation.
Last March, Erdogan dismissed the former governor of the Central Bank, Naji Iqbal, after he oversaw the bank’s repeated interest hikes since last November, and appointed Shihab Kavcioglu in his place to be the fourth governor of the bank in two years, which led to a 12% drop in the lira. against the dollar in a week.
The lira, the worst performing currency among emerging markets this year, was dealt another blow last week due to concerns about global inflation and early elections in Turkey.
Meanwhile, the Turkish president said that Turkey’s doors are open to foreign companies for investment, indicating his country’s readiness to give American companies all kinds of support in this regard.
In statements he made on Tuesday evening, during a meeting with a number of journalists on Turkish state television, he said that he had met with representatives of about 30 American companies during the past days, adding, “We told them that our Turkish Investment Office is at your disposal, we are ready to provide you with all kinds of support. “.
He added that the meeting with representatives of American companies was good and based on mutual interest, and that the upcoming meetings will be in the United States after the Corona pandemic period.
Erdogan stated that the Turkish economy was the fastest growing in Europe during the first quarter of this year with a rate of 7%, noting that the most prominent component of the growth was in machinery and equipment investments, which amounted to 30.5%.
On the expectations of the recovery of the Turkish tourism sector, Erdogan said that the Minister of Culture and Tourism Mehmet Ersoy recently visited Germany and Russia, accompanied by a delegation, and that he returned with some positive news.
Turkey relies on hard currency income from tourism to support its current account deficit, and risks another lost season this year as several countries impose travel restrictions due to the high number of coronavirus cases.
During the same press meeting, the Turkish president announced that he will announce new news next Friday about oil and gas discoveries in the Black Sea.
This came in statements on Tuesday evening, during a meeting with a number of journalists on Turkish state television.
And last Thursday, Erdogan said that his country had succeeded in producing oil from closed wells that were previously filled in, on the pretext that they do not contain oil.
On October 17, the Turkish President announced the discovery of an additional 85 billion cubic meters of natural gas in the Black Sea, bringing the total gas reserves discovered in the “Tuna 1 / Sakarya field” to 405 billion cubic meters.