'Turkey needs to swallow bitter pills at this point,' Erdoğan says about Central Bank interest rate hike

Turkish President Recep Tayyip Erdoğan has said that Turkey "needs to swallow some bitter pills" to recover its economy, referring to the Central Bank's interest rate hike the day before. The president has been known for his aversion to high interest rates, as he believes they promote inflation.

Erdoğan, accompanied by ruling AKP officials, attends the 18th MÜSİAD EXPO fair at TÜYAP Fair Convention and Congress Center in Istanbul on Nov 20.

Duvar English

Turkey will need to swallow some bitter pills, such as increasing the Central Bank's interest rates, in order to improve its economy, President Recep Tayyip Erdoğan said on Nov. 20.

The president's comment comes a day after the Central Bank bumped interest rates to 15 percent, going against Erdoğan's personal interpretation of macroeconomic theory that higher interest rates prompted inflation. 

"We realize that we might need to swallow some bitter pills at this point," Erdoğan said. "This is how I look at the interest rate hike yesterday. We must save Turkey from the downward spiral of interest, inflation and [high] foreign exchange rates."

The president maintained that high interest rates in fact caused inflation, and not vice versa, and that interest rates were "an exploitation of consumers by making money off of money."

The president also asked all citizens to import their overseas investment and to pump cash back into production and exports. 

"We should enhance the trust of our nation and investors in our national currency, Turkish liras, thus reduce the weight of foreign exchange currency in deposits," he said. 

The president continued his rhetoric of the government planning to take reforms in both judiciary and financial markets, and said that Ankara is determined to bring about a new boom era for Turkey's economy and democracy.