President points to July or August for monetary easing
Political interference has eroded central bank credibility
Currency shed 16 since cenbank chief ousted in March
ISTANBUL, June 2 Reuters President Tayyip Erdogan sent Turkeys lira currency to new alltime lows on Wednesday after he called for interest rate cuts in the next two months and said he spoke to the central banks new governor about it.
The lira by far the worst performer in emerging markets this year largely due to perceived political interference in policy fell by some 4 in thin early trade to 8.88 versus the dollar before recouping some losses.
I spoke to the central bank governor today we certainly need to lower interest rates, Erdogan said in a televised interview with state broadcaster TRT Haber late on Tuesday.
For that, we need to see July, August for interest rates to start coming down, he said, adding that lowering rates would lift the burden on investments and help along recovery from the coronavirus pandemic.
Erdogans frequent calls for lower borrowing costs and his abrupt removal of three central bank chiefs in less than two years has eroded Turkeys monetary credibility and left it more vulnerable to high inflation and financial crisis.
The currency was at 8.615 against the dollar at 0656 GMT.
It has lost 16 since midMarch when Erdogan, a selfdescribed enemy of interest rates, ousted a hawkish and wellrespected central bank chief and installed a likeminded critic of tight policy….