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Meanwhile, in Turkey:
After the March 30 local elections, Turkish Prime Minister Recep Tayyip Erdogan began applying suffocating pressure on Erdem Basci, the governor of Turkey's Central Bank, to lower the interest rates he deemed as too high.

The frequent calls to "lower the interest rate" by Erdogan in his usual abrasive manner, in a language tantamount to scolding, are threatening the presumed independence of the Central Bank and denting the international prestige of the institution.

[...]

Erdogan's reaction to Basci was harsh. In his address to the AKP parliamentary group on May 27, he said, "So what? What independence? ... Don't make fun of people [by lowering the interest rate by] half a point. This interest rate is too high. This has to go down so that real investments will increase. We are politicians. We are accountable to people."

He continued, "It's enough. I have to say this. ... The interest rate is the cause, inflation is the effect."

According to Erdogan's thesis, which points to inflation as an effect of interest, if the interest rate is lowered, inflation will follow.

by gk (gk (gk quattro due due sette @gmail.com)) on Thu Jun 5th, 2014 at 07:03:17 AM EST

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