(Bloomberg) -- Turkey’s president Recep Tayyip Erdogan has issued a stark warning to his country’s central bank. If he wins a presidential parliamentary election next month, he says he’ll clamp down on central bank independence to keep interest rates low. This is obviously a terrible idea, and comes at the worst possible moment. The lira is in freefall and inflation on the rise. Turkey needs a strong monetary authority, not a stooge obeying the president’s bizarre orders.
Erdogan has long held wrong-headed views on the impact of interest rates. Unlike the vast majority of economists, he believes a tight monetary policy causes rather than tames inflation. In an interview with Bloomberg TV on Monday, he went a step further, saying he was ready to interfere with the central bank if it didn’t follow his advice. “It’s those who rule the state who are accountable to the citizen,” he said.
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