Turkish President Tayyip Erdogan. Photo: AP
Turkish President Tayyip Erdogan. Photo: AP

Turkey not in crisis, will fight ‘economic war’, says President Erdogan

Turkish President Tayyip Erdogan calls on Turks to sell dollars and euros to support the national currency

ISTANBUL: The Turkish economy is not in a crisis or going bankrupt and the fluctuations in the foreign exchange rate are the ‘missiles’ of an economic war waged against Turkey, President Tayyip Erdogan said on Saturday. Speaking at a provincial meeting of his AK Party in the Black Sea coastal city of Rize, Erdogan said Turkey was preparing to conduct trade through national currencies with China, Russia and Ukraine.

He branded interest rates a “tool of exploitation", which should be kept as low as possible. “Interest rates should be kept to a minumum because they are a tool of exploitation that makes the poor poorer and the rich richer," Erdogan said.

The nominally independent central bank has defied pressure over the last few weeks to hike interest rates in the face of high inflation and a collapsing currency.

Erdogan also repeated a call on Turks to sell dollars and euros to support the national currency, which has been in free-fall over concerns about the economy and deteriorating ties with the US.

The lira sell-off has deepened concern about exposure to Turkey, particularly whether over-indebted companies will be able to pay back loans taken out in euros and dollars after years of overseas borrowing to fund a construction boom under Erdogan. Lira has fallen more than 35% this year after losing nearly a quarter of its value in 2017. This week alone, it has lost about 15%. Such relentless depreciation drives up the cost of imported goods from fuel to food for ordinary Turks.