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ISTANBUL (AP) Turkish President Recep Tayyip Erdogan said his economic policies have not changed, but in comments published Wednesday, he suggested his finance minister would have an opportunity to move away from an unconventional approach that many blame for the deterioration. cost of living crisis.
Last month, Erdogan, who was re-elected for the third term, appointed Mehmet Simshay, who previously worked in the Cabinet of Ministers and is an influential banker in the international world, as the Minister of Treasury and Finance. He also picked former US-based bank executive Hafize Gaye Erkan head of the central bankthe first woman takes the role.
While the appointments signaled a shift in Turkish leaders’ views on how to stimulate the economy for a long time, uncertainty over Erdogan’s stance and an apparent move to loosen government controls on foreign exchange markets led Turkey. currency to sink It hit a record high against the US dollar last week.
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Erdogan said that he accepted the demand of Simsek for a new economic program, but his personal position on keeping interest rates at a low level against the background of rising inflation has not changed.
Some of our friends should not make the mistake of (asking) whether the president will make a serious change in the interest rate policy. I remain in the same position, Erdogan said on Tuesday while returning from a state visit to Azerbaijan. We agreed that (Shimsek) should take the necessary steps with the central bank quickly and diligently.
On Wednesday, Turkey’s state-run Anadolu Agency and other media published his comments.
Critics blame the rising cost of living crisis on Erdogan unusual interest policy, which goes against conventional economic thinking that raising rates will fight inflation. Central banks elsewhere, including the US Federal Reserve and the European Central Bank, have raised borrowing costs to cushion spikes in consumer prices.
When asked whether it was his idea to appoint Erkans as the new chairman of the Central Bank of Turkey, Erdogan said that Simsek gave him this idea.
We thought that we would become a female administrator of the Central Bank for once and took this step. Of course we told him our expectations, he said.
We hope that neither our treasury and finance minister nor our central bank will let us down with these steps,” he added.
Erkan replaced Sahap Kavcıoğlu, who has overseen a series of interest rate cuts as governor of banks since 2021.
He was a managing director at the investment banking company Goldman Sachs, and in 2021, he held the position of CEO for six months at San Francisco-based First Republic Bank. The failed bank was taken over by JPMorgan Chase after US regulators seized it in May.
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