Erdogan defends 'risky but correct' economic policy

Turkish President Recep Tayyip Erdogan defended Wednesday his "risky but correct" economic policy of low interest rates as the central bank intervened in markets to prop up the falling lira.

Turkish households are under acute pressure with a currency crisis diminishing Turks' purchasing power as inflation remains high and the lira keeps hitting record lows.

Under pressure from Erdogan, who has sacked three governors since 2019, the central bank made a series of rate cuts since September despite double-digit inflation.

The Turkish leader goes against conventional economic thinking to claim high interest rates cause high inflation, and vowed again to keep the main rate low.

"What we are doing is right. We have made and are making a politically risky but correct plan," Erdogan told ruling party lawmakers in parliament in Ankara.

"The world knows how uncomfortable I am with high interest rates. I have never been pro-interest rates. I wasn't today and I won't be tomorrow," the president added.

He said Turkey had moved away from a policy based on high rates and instead switched to a growth strategy based on investments, employment, production and exports.

The focus on growth is paying off as the economy recorded growth of 7.4 percent year-on-year in the third quarter of 2021, official data published on Tuesday showed.

Turkey's economy is expected to grow by nine percent this year and 3.5 percent in 2022, according to the European Bank for Reconstruction and Development.