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Turkey’s Erdogan Sees Interest Rate Cut Likely Next Week

Onur Ant

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Turkish President Recep Tayyip Erdogan says he “believes” the central bank will cut interest rates when its monetary-policy committee meets Thursday, state news agency Anadolu reported.

Inflation will decelerate after rates are slashed, Erdogan said in an apparent reference to his personal belief that price gains slow when the cost of borrowing is reduced. Most economists think the opposite is true.

Erdogan sacked the central bank’s governor in July for failing to live up to his expectations for rapid cuts to interest rates. The new governor delivered a 425 basis points cut to the benchmark rate in the first meeting he chaired.

The lira jumped 2.1% in the five days through Sept. 6, its first weekly gain since Aug. 9.

To contact the reporter on this story: Onur Ant in Istanbul at oant@bloomberg.net

To contact the editors responsible for this story: Dana El Baltaji at delbaltaji@bloomberg.net, Srinivasan Sivabalan, Yakob Peterseil

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