Erdogan determined to reduce inflation but says he hasn't changed stance on rates

MADRID, 14 Jun.

Erdogan determined to reduce inflation but says he hasn't changed stance on rates


Turkish President Recep Tayyip Erdogan, recently re-elected to office, has for the first time publicly expressed his support for the new economic team, led by Finance Minister Mehmet Simsek and Hafize Gaye Erkan, Governor of the Central Bank of Turkey, underlining the determination to reduce inflation "to single digits", although he has assured that he maintains the same position regarding interest rates.

In statements to the Ottoman country's media on the return flight after the visit to Azerbaijan, Erdogan emphasized that the economy cannot be left aside and is the first issue of each country, highlighting the agility of the steps taken between the Ministry of Finance and the Central Bank, pointing out that this also underlines the commitment to reduce the inflation rate below 10%.

"Of course, we accepted that he (Finance Minister) would take the steps that are going to be taken here quickly and easily with the Central Bank, we said good luck to him, and in this way, we also declared our determination to reduce inflation to single digits," said the Turkish president.

However, Erdogan specified that "they should not fall into the error" of thinking that there is a serious change in the president's thinking on interest rate policy. "I'm the same here," he stressed, recalling his commitment to a "low interest, low inflation" monetary policy. "Now I work with the same understanding," he added.

Last week, Hafize Gaye Erkan was appointed as the new governor of the Central Bank of Turkey, thus becoming the fifth person in charge of the entity in the last four years and the first woman to assume the reins of the country's monetary policy.

The new governor of the Central Bank of Turkey has spent most of her professional career in the financial sector, having worked for almost a decade at Goldman Sachs and later spending eight years at First Republic Bank, a US regional bank where she became co -CEO, although she left the entity in January 2022, before the bank's intervention this spring.

The Central Bank's Monetary Policy Committee (MPC) has scheduled its first meeting under the presidency of the new governor on June 22.