World Turkey: The central bank keeps the interest rate despite the pressure of Erdogan

16:15  15 april  2021
16:15  15 april  2021 Source:   rfi.fr

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Turquie : la banque centrale maintient le taux d’intérêt malgré la pression d’Erdogan © Pixabay Turkey: The central bank maintains the interest rate despite the pressure of Erdogan while Erdogan is a low rate partisan Interest, the Central Bank of Turkey nevertheless left its main interest rate unchanged, at 19%, after the first monetary policy meeting since the brutal replacement last month of its previous Governor.

The Central Bank of Turkey plays the status quo on the interest rate forehead. While the appointment of Sahap Kavcioglu in replacement of Naci Agbo , a former Minister of Finance respected, had strengthened fears of lowering the Central Bank rate (as calls for his wishes Recep Tayyip Erdogan in Despite high inflation), the main interest rate has been maintained at 19%. "The interest rate will continue to be set at a higher level than inflation in order to keep a powerful deflationary effect until the indicators announce a permanent decline of inflation. ," said The central bank in a statement.

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The course of the Turkish book remained stable after this announcement, a majority of economists who bet on a first decision under the sign of stability under Mr. Kavcioglu. The rise in rates is one of the main instruments that make it possible to combat inflation. In Turkey, it amounted to 16.19% annually in March, according to official figures. However, President Erdogan is hostile at high interest rates he sees as a brake on growth. Classic economic theories, it even supports that raise interest rates feeds rising prices.

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last month, Erdogan brutally limited Mr Agbal after he had noted the main interest rate From the central bank of 200 basis points. This decision caused a shock in the markets that resulted in a collapse of the Turkish book, which lost more than 8% of its value against the dollar since the beginning of the year.

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The appointment of Mr. Kavcioglu, the fourth leader of the Central Bank in two years, has preoccupied the economists who see him a more malleable governor and who can answer the injunctions of the Turkish president. Last week, Mr. Erdogan expressed the wish to see the interest rates brought back to " one figure ".

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Turkey: Erdogan denounces the "lies" and the "betrayal" opposition on the reserves of the central bank .
© Pixabay Turkey: Erdogan denounces the "lies" and the "betrayal" of the opposition on the reserves From the central bank "lies", "betrayal" ... while the opposition suggested that the Central Bank of Turkey had dilapidated its reserves for the benefit of certain companies close to power, the Turkish President Recep Tayyip Erdogan denies. He defended the use by the central bank of his foreign currency reserves to support the economy.

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