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Turkey said to keep interest rates low post-election

Tie, Formal Wear, Accessories REUTERS/Murad Sezer
Finance minister Nureddin Nebati says the central bank will keep cutting rates as inflation slows and keep them low

Finance minister Nureddin Nebati said Turkey would keep interest rates low after elections expected in May and not reverse course on monetary policy, according to an interview published by Bloomberg.

Contrary to some analyst expectations that President Tayyip Erdogan will roll back his stimulus programme after the vote, Nebati was quoted as saying the central bank would keep cutting rates as inflation slows and keep them low.

Pressed by Erdogan, the bank has slashed its key rate to nine percent from 19 percent since September 2021, setting off a currency crash late that year and sending inflation soaring to a 24-year peak above 85 percent in October of 2022.

An anti-Erdogan political alliance has pledged to roll back his unorthodox economic policies should they win the presidential and parliamentary elections. Some analysts think Erdogan will also reverse course if he wins.

“The idea that the president will raise rates is no longer possible,” Nebati was quoted as saying, adding policy would stay the course “as long as I am here.”

“Our president will not compromise on this,” Bloomberg quoted him as saying.