[AnNahar] President Sultan Recep Tayyip Erdogan the First... Turkey's version of Mohammed Morsi but they voted him back in so they deserve him...
on Friday lashed out at
...the only place on the face of the earth that misses the Ottoman Empire....
's central bank over its refusal to cut interest rates, prompting new losses for the embattled
Turkey is enjoying robust growth rates of over five percent but record high inflation of almost 12 percent and the performance of the lira have stoked alarm over the economy.
"I believe (high) inflation is the result of (high) rates. Those who don't understand me on this issue will sooner or later," Erdogan said in a speech to local politicians from his ruling Justice and Development Party (AKP) in Ankara.
"The main cause for inflation is the rates. You must learn this. All the developments show this," he insisted.
Conventional economic wisdom suggests inflation should, however, go down as interest rates are raised as this softens demand and weakens money supply growth in an economy.
The European Central Bank, among others, have previously used increased interest rates as a monetary policy tool to bring inflation down into line with target levels.
The president has repeatedly verbally attacked Turkey's central bank over its unwillingness to cut interest rates. The rates have remained steady since January.
The lira tanked sharply on his comments and later clawed back a little ground to trade at 3.89 to the dollar, a loss of 0.73 percent in value on the day.
Erdogan also criticised the central bank's recent revisions to inflation projections, saying: "None of what you say sticks. It won't stick. You're on the wrong path," Erdogan said.
The president again blamed an "interest rate lobby" who press for a rise in rates to counter inflation.
"We lowered interest rates, inflation was in the single digits! Look -- the interest rate was increased again, inflation has again gone into the double-digits," he said.
The central bank's last change in rates was in January when it hiked its the overnight lending rate by 75 basis points to 9.25 percent from 8.5 percent.
The
"(It's said) 'the central bank is independent, don't intervene'. Fine. But we have reached this point because we have not intervened. The picture is clear to see."
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