Erdogan Says Interest Rates Will Fall After Inflation Slows

(Bloomberg) -- President Recep Tayyip Erdogan said Turkey’s main objective is to reduce interest rates as inflation slows to official medium-term targets.

Thursday’s interest rate hike by the nation’s central bank is part of “bitter pill policies” that Turkey must follow, Erdogan told a group of businessmen in televised remarks from Istanbul on Friday.

Bank Chief Picked by Erdogan Returns to Policy Mainstream

While the Turkish leader renewed his tacit approval for the recent return to more orthodox monetary policies, he also repeated his widely discredited belief that higher interest rates fuel inflation. Most economists and central bankers around the world say the opposite is true.

The lira was little changed after Erdogan’s remarks and was trading 0.7% lower at 7.6029 per dollar at 12:17 p.m. in Istanbul.

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