Erdogan says Turkey will break economic ‘triangle of evil’ with reforms

Ankara: Turkey will bring in structural reforms to break the “triangle of evil” of interest rates, inflation and exchange rates, President Tayyip Erdogan said on Saturday, adding Ankara was determined to form a system based on production and employment.

Erdogan promised a slate of judicial and economic reforms last month, leading to expectations of the possible release of politicians, including Kurdish ones, and human rights advocates from jail. But Erdogan’s recent comments on court rulings and criticism aimed at his government have fuelled scepticism about his pledge.

Speaking via videolink at a ceremony in Ankara, Erdogan said 2021 would be “the year of democratic and economic reforms” and that efforts to present the reforms to parliament would move “as soon as possible”.

“We hope to overcome troubles from economic attacks and the pandemic measures as soon as possible. By speeding up structural reforms, we are determined to form a system based on production and employment and breaking the interest rates, inflation and exchange rates triangle of evil,” Erdogan said.

“We are not carrying out democratic reforms because anyone forced us to, but because our people deserve them,” he added.

Erdogan has called interest rates the “mother of all evil” and says he believes high rates stoke inflation – counter to monetary theory. He has often characterised Turkey’s economic woes as the result of foreign attacks on the economy.

Turkey’s central bank hiked interest rates by 200 basis points to 17 per cent on Thursday, seeking to cool double-digit inflation and bolster its credibility under new governor Naci Agbal.

Turkey has also faced criticism from rights groups and its Western allies for a widespread crackdown following an abortive coup in 2016, under which thousands of people from the military, public and private sector were detained, sacked or arrested.