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ANKARA, Nov 17 (Reuters) - Turkish President Tayyip Erdogan on Friday lashed out at the central bank, saying a lack of government intervention in monetary policy had left Turkey saddled with high inflation and facing a potential slowdown in investment.
The comments from Erdogan - some of his starkest yet about the government’s need to intervene in policy - immediately weighed on the lira currency.
“If you try to give loans with such high rates, of course investments will be hindered and halted... We lowered interest rates and inflation fell to single digits,” Erdogan told officials from his ruling AK Party in Ankara.
“They say, ‘The central bank is independent, so don’t interfere’. It is coming to this point because we aren’t intervening.”
The lira currency weakened to 3.9035 to the dollar following his comments.
Erdogan said there may be a meeting next week with the prime minister, relevant ministers and state banks to discuss the issue of high interest rates, Haberturk and other newspapers reported earlier on Friday.
“We are determined to deal with the interest rate lobby and interest rates,” Haberturk cited Erdogan as telling reporters during a visit to Qatar.
Erdogan, an economic populist, wants to see lower interest rates to encourage lending, consumption and construction to boost the economy. He repeated on Friday his oft-stated belief that high interest rates cause inflation - a stance at odds with orthodox economics.
His calls for lower interest rates have raised concerns among investors that policy is less than independent in Turkey, hitting the lira currency. (Reporting by Orhan Coskun and Tuvan Gumrukcu; Writing by David Dolan; Editing by Daren Butler)