Erdoğan says interest rate hike was bitter pill Turkey had to swallow

Turkish President Recep Tayyip Erdoğan said an interest rate hike by the central bank on Thursday was among the measures needed for Turks to look at the future with confidence.

“We understand that there are some bitter pills we have to swallow at this point. I assess yesterday’s decision to raise interest rates in that context,” Erdoğan said in a speech to businessmen on Friday, according to the Dünya newspaper.

Turkey’s central bank increased the benchmark interest rate by 4.75 percentage points to 15 percent on Thursday, implementing the biggest hike in two years to help steady the lira, which had slumped to a record low earlier this month, and to rein in inflation, which stands at 11.9 percent.

The central bank took the decision after Erdoğan sacked and replaced its governor on Nov. 7 and his son-in-law Berat Albayrak stepped down as treasury and finance minister.

In a separate statement, Lütfi Elvan, Albayrak's replacement, said the central bank had the responsibility for defining and implementing the policies needed to ensure price stability. Turkey's fiscal policies would support the fight against inflation, he said.