President Recep Tayyip Erdogan said Thursday Turkey will take further action to prevent fluctuation in foreign exchange rates.

Speaking at a meeting of the Confederation of Turkish Tradesmen and Craftsmen (TESK) in Ankara, Erdogan said the country is struggling against all issues affecting the Turkish economy without getting outside the boundaries of the free market system.

“We are well aware that some other countries that had faced similar problems have solved those problems in a way that does not fit with the definition of a free market economy,” Erdogan said.

“However, we did not resort to such ways in the past, and will not [do it in the future],” he added.

The U.S. dollar/Turkish lira exchange rate stood at 6.44 as of 1 p.m. (1000GMT) Thursday.

The USD/TRY exchange rate saw harsh fluctuations as lira lost around 40 percent against the dollar since the beginning of this year.

Last year, the average USD/TRY exchange rate was 3.65 while one dollar traded for 3.02 Turkish liras on average in 2016.

Interest rates

President Erdogan also noted that his thoughts on the interest rates remain unchanged, “but the Central Bank is independent.”

“But apart from it [Central Bank], private lenders are acting according to the Central Bank’s decision,” he said. “There are some practices based on interest rates of up to 50 percent.”

“Interest [rate] is the reason where inflation is the outcome,” Erdogan said, adding that Turkey can never be a part of exploitation tool called ‘interest’ or contribute to it.

On Thursday afternoon, the Turkish Central Bank will hold its seventh Monetary Policy Committee meeting this year and announce its decision about interest rates.

According to the country’s statistical authority TurkStat, Turkey’s annual inflation was 17.90 percent in August, up from July’s figure of 15.85 percent. Meanwhile CB’s one-week repo rate is currently at 17.75 pct.

Source: Anadolu