Erdoğan vows to ‘continue to pressure banks over interest’ in Turkey

Erdoğan vows to ‘continue to pressure banks over interest’ in Turkey

The government will continue to pressure banks in Turkey over high interest rates, President Recep Tayyip Erdoğan has vowed once again. 

“We will certainly pressure [them]. We cannot [tolerate] credit interest rates reaching up to 15, 16, 18 percent. Together with our prime minister we will talk to the relevant ministers. We will say, ‘You’re going to lower [the credit interest rate].’ There is a need to earn from higher demand rather than cornering investors with high profit rates,” Erdoğan told reporters while returning from a recent trip to Kazakhstan. 

Referring to his pledge for a “180-day program” on government work, the president said preparations are still underway.

“All of our ministers are conveying what they have prepared to our prime minister. Then our prime minister will complete his study and present it to me. After I complete my work, God willing, we will take steps,” said Erdoğan.

He also highlighted that the Credit Guarantee Fund (KGF) has positively contributed to the markets, especially in providing credit to small and medium-sized companies.

“We will certainly overcome the conservatism of banks in terms of giving credit. We will certainly pressure them. We will certainly clamp down on them, particularly starting with the public banks … Thus, there will be a different period for investment and Turkey will attain a better performance in development,” he said.

“We have tried to pave the way for this as the state, but it is not sufficient. Banks should also facilitate it. Interest rates should be lowered,” Erdoğan added.

The president has long railed against high interest rates, even at times claiming that political turbulence in Turkey is the work of an “interest rate lobby” aiming to profiteer from instability.

Regarding the recently announced growth rate of 5.1 percent in the second quarter of 2017, he said he hoped the rise will continue in the third quarter but warned that dark powers aimed to sabotage the country’s growth.   

“Will such a Turkey be tolerated? Of course, they cannot get over it. But our population is 80 million and growing,” Erdoğan said, also referring to times in the past when interest rates were at 4.6 percent.

 “They went crazy when [interest rates were at 4.6 percent] so they dealt a blow with the [2013 anti-government protests] Gezi events. Now they are trying to do the same thing in other places as well, but they could not succeed in Turkey,” he said, particularly referring to his recent meeting with Venezuelan President Nicolas Maduro.

“The president of Venezuela has also told me about the games that are being played there. The actors are all the same. God willing, we will overcome them,” Erdoğan said.

He also touched on the increase in the Central Bank’s foreign currency reserves, saying “The foreign currency reserves of the Central Bank had gone down to $106 billion at one stage. But now they have reached $112 billion.”

‘War on ignorance’ 

Meanwhile, President Erdoğan also touched on the recent Organization of Islamic Cooperation’s (OIC) Science and Technology Summit held in Astana.

“In the summit, we stressed the need to further invest in science and technology, and to form programs and curricula focusing on education. Turkey will maintain its support for these efforts,” he said.

Erdoğan also compared Organization for Economic Co-operation and Development (OECD) member countries with OIC countries in terms of education investment.

“While the allocation spared for education in national income is at 5.2 percent in OECD countries, it is unfortunately below 1 percent in the Islamic world. This gap must be closed. Serious steps must be taken,” he said.