Categories: Economy

Turkish lira in free fall after Erdogan refuses to raise interest rates citing Islamic principles

<p>
<strong>Politics and religion must be kept away from monetary management, but Erdonomics–economy driven by Turkish President Recep Tayyip Erdogan's specially curated Islamic principles–follows another track. The already battered Turkish lira plunged further after Erdogan cited religious reasons for continuing with low interest rates, referring to the banking principles of Islam.<br />
</strong></p>
<p>
He said that his “Muslim faith prevented him from supporting rate hikes,” AFP reported.</p>
<p>
Erdogan has come under scrutiny as the country’s currency keeps falling. The lira is now the worst performing currency in the world. On Monday, the lira touched a new low of 17.4 to a dollar.</p>
<p>
In January, the lira was valued at around 7.5 to a dollar.</p>
<p>
“They complain we keep decreasing the interest rate. Don't expect anything else from me,” he said. “As a Muslim, I will continue doing what our religion tells us. This is the command,” he added.</p>
<p>
<strong>Also read: <a href="https://www.indianarrative.com/opinion-news/turkey-s-central-bank-is-fast-losing-credibility-following-erdogan-s-diktat-132829.html">Turkey's Central Bank is fast losing credibility following Erdogan's diktat</a></strong></p>
<p>
As economists have blamed Erdogan’s policies and his insistence of continuing with low interest rate even as inflation kept rising, the President seems undeterred. Turkey’s inflation rate in November touched 21.31 per cent.</p>
<p>
According to Fitch Ratings, Turkey’s inflation rate could further rise to 25 per cent this month.</p>
<p>
“You cannot run a modern economy integrated into the global economy on this basis,” economist Timothy Ash of BlueBay Asset Management said in a note to clients, news agency AFP said.</p>
<p>
An analyst told India Narrative that when the country’s central bank is not allowed to operate independently, economic problems are “natural fallouts.”</p>
<p>
“The central bank should be allowed to decide on interest rates, if you bring in religion or politics, then there is very little to say,” the analyst said.</p>

IN Bureau

Recent Posts

India, Mauritius join hands to trade in local currencies

Central banks of India and Mauritius have signed an MoU to enable the use of…

10 hours ago

Israel vows to “act against Hamas with increasing military strength”

Prime Minister Benjamin Netanyahu and Defence Minister Israel Katz have directed the Israel Defense Forces…

11 hours ago

“There is no future for any separatism”: Former Australian PM Tony Abbott on Khalistan extremism

Former Australian Prime Minister Tony Abbott said on Tuesday that there is "no future for…

12 hours ago

Defence Minister Rajnath Singh and his Netherlands counterpart Brekelmans hold talks

Defence Minister Rajnath Singh held a meeting with his Netherlands counterpart Ruben Brekelmans in Delhi…

12 hours ago

India, EU discuss bilateral ties, parliamentary exchanges

Ministry of External Affairs Secretary (West) Tanmaya Lal held a meeting with European Parliament Chair…

16 hours ago

Tibetan Parliament-in-Exile Speaker condemns worsening situation of Tibet under Chinese rule

Tibetan Parliament-in-Exile Speaker Khenpo Sonam Tenphel has condemned the worsening situation in Tibet under Chinese…

16 hours ago