Turkish Economy Minister Nihat Zeybekci on Friday took issue strongly with the remarks of the ex-governor of the Central Bank on interest rates.
The minister replied sharply to the ex-governor of the Central Bank of Turkey, Durmus Yilmaz, who had told BBC Turkey on Tuesday that high interest rates are not the only reason for Turkey's slow economic growth, which is the point of view of government officials.
“To say that, if low rates were the main reason behind the economic growth, Japan and other countries with low rates would see growth increase rapidly, is to approach an equation that has three to four unknowns with only one known,” Zeybekci said.
Japan, U.S., EU and Turkey, each has a unique dynamic, Zeybekci said, so that each of them should be evaluated in its own context.
"Workforce participation is now 51 percent in our country. When we consider population growth rate and rising workforce participation together, it is clear that Turkey should not see growth rates below 5 percent as a success,” Zeybekci said.
Pointing out that the European Central Bank has held interest rates at almost 0 levels for a long time,Zeybekci said that Europeans aim to increase their competiveness and exports with the help of low rates and cheap local currency.
Interest rates are controversial in Turkey as government officials have repeatedly criticized the central bank's tight money policies as limiting economic growth.
However the central bank has maintained relatively high interest rates with the object of controlling inflation and stemming the slide in value of Turkish lira against other major currencies.