Turkish President Recep Tayyip Erdoğan said it will be impossible for the country to achieve its inflation goals while interest rates remain high.
Lowering interest rates would also help increase employment and investments, Erdoğan told reporters in televised comments after a cabinet meeting on Monday.
Turkey’s central bank has more than doubled its benchmark interest rate to 17 percent since September to rein in double-digit inflation and to defend the lira. Annual consumer price inflation accelerated to 14.6 percent in December from 14 percent the previous month.
The Turkish Statistical Institute will announce January inflation figures on Wednesday. The rate is expected to increase to 14.8 percent, according to the average estimate in a survey of economists by the state-run Anadolu news agency. A poll by Reuters predicted a rate of 14.7 percent.
Erdoğan regularly reiterates a view that higher interest rates spur inflation. His theory contradicts with traditional economic thinking, which states that central banks can increase borrowing costs to rein in consumer demand and price increases.
The central bank said last week that interest rates would remain high this year to help slow inflation to its 2021 goal of 9.4 percent and to a medium-term target of 5 percent, which it says will not be achieved until 2023.