Erdogan's Economic Shift: Interest Rates and Inflation in Focus

Turkey's President Erdogan plans more interest rate cuts by 2025, following a recent 250 basis point cut by the central bank. He emphasizes lowering inflation as a priority, employing various tools alongside monetary policy. Erdogan expects reduced rates to curb inflation, describing them as essential.

Turkey's President Tayyip Erdogan announced on Saturday that the government plans to implement further interest rate cuts in 2025. This follows the recent reduction of the central bank's key rate by 250 basis points to 47.5%, steering away from a prolonged period of monetary tightening.

Erdogan emphasized that reducing inflation remains a top priority in the nation's economic strategy. In his address to AK Party members in Bursa, he highlighted the use of various tools alongside traditional monetary policy to achieve these goals, declaring 2025 as the significant year for rate reduction.

Describing interest rates as crucial, Erdogan expressed confidence that lower rates will also lead to decreased inflation. The central bank has reduced its policy meetings next year to cautiously transition to anticipated rates of 28.5% by the end of 2025, as per a Reuters poll.

(With inputs from agencies.)