Lower interest rates better for Turkey, says minister

With interest rates in Turkey remaining source of debate, Turkish Economy Minister Nihat Zeybekci says central bank may ease rates once new government formed

Photo by: AA
Photo by: AA

Updated Jul 28, 2015

According to Turkish Economy Minister Nihat Zeybekci, an interest rate cut by the Turkish Central Bank would benefit the Turkish economy. Zeybekci, a vocal critic of the central bank, said he believes the bank will be able to ease rates with the formation of a new government.

Zeybekci’s comments came one day before the central bank’s monetary policy committee is due to meet on June 23. However, the bank, which kept interest rate levels following its May meeting, is expected to keep interest rates at their current levels.  

The central bank has cut interest rates by 250 basis points and brought the key interest rate to 7.50 percent. In addition to lowering the one-week repo rate to 7.50 percent in its February meeting, the bank cut its overnight borrowing rate to 7.25 percent, while the overnight lending rate was cut by 50 basis points to 10.75 percent.

Zeybekci added the central bank’s job would be easier with continued political stability. Currently, Turkish political parties are negotiating to form a coalition government following the election of June 7.

TRTWorld and agencies