Turkish central bank bows to Erdogan’s pressure to cut rates

Sep 22, 2021, 5:39 PM | Updated: Sep 23, 2021, 5:41 am
Turkish President Recep Tayyip Erdogan addresses the 76th Session of the United Nations General Ass...

Turkish President Recep Tayyip Erdogan addresses the 76th Session of the United Nations General Assembly, Tuesday, Sept. 21, 2021 at U.N. headquarters. (Eduardo Munoz/Pool Photo via AP)

(Eduardo Munoz/Pool Photo via AP)

ISTANBUL (AP) — Turkey’s Central Bank unexpectedly cut the main interest rate by one percentage point on Thursday, bowing to President Recep Tayyip Erdogan’s demand for lower borrowing rates to boost growth.

The bank’s monetary committee cut the policy rate from 19% to 18% despite an annual inflation rate of 19.25%. Economists generally view higher interest rates as a curb on inflation but Erdogan has repeatedly said the reverse – that a high rate of interest causes price rises.

The decision sent the Turkish lira to a near-record low of 8.808 against the U.S. dollar.

Timothy Ash, an emerging markets economist for BlueBay Asset Management in London, described the move as “truly idiotic” in a note to investors.

“Huge risk (is) being taken by Erdogan, I think because his popularity is falling and he needs to take a risk to get the economy firing on all cylinders,” he added.

The bank’s governor, Sahap Kavcioglu, is the fourth appointee to the role since 2019 amid concerns over the bank’s independence. He had kept the interest rate at 19% since taking office in March. Erdogan called for a cut in rates last month.

The Turkish economy never fully recovered from a 2018 currency crisis when it was hit by the coronavirus pandemic, causing growing inflation and unemployment.

The country is set for an election in 2023, although an earlier poll could be called by the government, which has faced recent criticism over a range of problems, including its handling of the pandemic, the economy and even summer wildfires and floods.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

FILE - This Wednesday, March 31, 2021 file photo shows empty vials of Johnson & Johnson's one-dose ...
Associated Press

COVID vaccine: CDC expands booster rollout, OKs mixing shots

WASHINGTON (AP) — Millions more Americans can get a COVID-19 booster and choose a different company’s vaccine for that next shot, federal health officials said Thursday. Certain people who received Pfizer vaccinations months ago already are eligible for a booster and now the Centers for Disease Control and Prevention says specific Moderna and Johnson & […]
20 hours ago
FILE - In this May 25, 2021, file photo, Nissan's former chairman Carlos Ghosn speaks during an int...
Associated Press

Nissan ex-chair Ghosn set on restoring reputation

TOKYO (AP) — Carlos Ghosn, the former auto industry superstar whose career screeched to a halt with his arrest three years ago, isn’t about to settle into quiet retirement. The former head of the Nissan-Renault alliance fled to Lebanon in late 2019, while out on bail facing financial misconduct charges in Japan. In a recent […]
20 hours ago
A man lies still as devotees light oil lamps over his body as part of rituals to celebrate the tent...
Associated Press

AP Week in Pictures: Asia

Oct. 8-14, 2021 This photo gallery highlights some of the most compelling images made or published by Associated Press photographers in Asia and Pacific. The gallery was curated by AP photo editor Masayo Yoshida in Tokyo. Follow AP visual journalism: Instagram: https://www.instagram.com/apnews AP Images on Twitter: http://twitter.com/AP_Images AP Images blog: http://apimagesblog.com Copyright © The Associated […]
20 hours ago
The Statement of Facts to support the complaint and arrest warrant for Christian Manley is photogra...
Associated Press

Alabama native charged in Jan. 6 insurrection denied release

ANCHORAGE, Alaska (AP) — An Alabama native whom a judge alleged was “leading the charge” during the Jan. 6 insurrection at the U.S. Capitol was denied release Thursday in an Alaska courtroom while his case proceeds. Christian Matthew Manley then waived his right to preliminary hearing and asked that he be immediately transferred to the […]
20 hours ago
New Zealand Prime Minister Jacinda Ardern announces in Wellington, Friday, Oct. 22, 2021, an ambiti...
Associated Press

New Zealand sets 90% vaccination target to end lockdowns

WELLINGTON, New Zealand (AP) — New Zealand’s government on Friday set an ambitious target of fully vaccinating 90% of all eligible people to end coronavirus lockdowns. Prime Minister Jacinda Ardern had been under pressure to provide a pathway to freedom for people living in Auckland, who have been in lockdown for more than two months. […]
20 hours ago
Associated Press

California proposes buffer between oil drilling, homes

SACRAMENTO, Calif. (AP) — California Gov. Gavin Newsom’s administration on Thursday announced a proposal to ban new oil and gas wells within 3,200 feet (975 meters) of sites such as schools and homes. Here’s a look at the details: THE BUFFER The 3,200-foot zone between new drilling and community sites would be the largest in […]
20 hours ago

Sponsored Articles

...

Medicare open enrollment for 2022 starts Oct. 15 and SHIBA can help!

Washington State Office of the Insurance Commissioner SPONSORED — Medicare’s Open Enrollment Period, also called the Annual Election Period, is Oct. 15 to Dec. 7. During this time, people enrolled in Medicare can: Switch from Original Medicare to a Medicare Advantage plan and vice versa. Join, drop or switch a Part D prescription drug plan, […]
...

How to Have a Stress-Free Real Estate Experience

The real estate industry has adapted and sellers are taking full advantage of new real estate models. One of which is Every Door Real Estate.
...
IQ Air

How Poor Air Quality Is Affecting Our Future Athletes

You cannot control your child’s breathing environment 100% of the time, but you can make a huge impact.
...
Swedish Health Services

Special Coverage: National Prostate Cancer Awareness Month

There are a wide variety of treatment options available for men with prostate cancer. The most technologically advanced treatment option in the Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform.
...
Marysville Police Department

Police Opportunities in a Growing, Supportive Washington Community

Marysville PD is looking for both lateral and entry level officers. Begin or continue your career in law enforcement for a growing, supportive community.
...
Comcast

Small, Minority-Owned Businesses in King County and Pierce County Can Now Apply For $10,000 Relief Grants Through Comcast RISE

Businesses in King County and Pierce County can apply beginning on October 1, 2021, at www.ComcastRISE.com for a chance to receive a $10,000 relief grant.
Turkish central bank bows to Erdogan’s pressure to cut rates