Turkey's Central Bank governor pressured to resign
Turkey's Central Bank lowered interest rates under political pressure, but this action could not satisfy Prime Minister Recep Tayyip Erdogan.
The inflationary trend in Turkey continues. In April, consumer prices went up by 9.38% to reach their highest level of the past two years, while “core inflation” reached 10.05%, the highest figure of the last six years.
The Central Bank Monetary Policy Council met on May 22 in an environment of rising inflation concurrent with government pressure to lower interest rates.
The Central Bank, taking advantage of a slight improvement of market expectations and indicators, lowered the weekly repo interest known as a "political interest" by 50 base points, from 10% to 9.5%.
This was a surprise move, because nobody expected the lowering of interest rates at a time of rising inflation. But the Central Bank opted to please the government with a symbolic reduction, and hence the decision was more political than economic.
