President Tayyip Erdogan claimed that he had previously dropped Turkey’s inflation to approximately 4% and that he will do so again, despite the fact that it had risen to 21% following a drive for extreme interest rate reduction that he engineered.

Erdogan has claimed that the program, which has caused the Turkish lira to plummet, is part of a successful “economic independence war.”

He claims it will stimulate exports, employment, investments, and growth, but most analysts regard it as foolish, predicting that inflation will rise to more than 30% next year.

On Friday, the lira fell below 17 to the dollar, a new low. Fears of an inflationary spiral have caused the currency to lose 55% of its value this year and 37% in the last 30 days.

In a meeting with African youth on Saturday that was broadcast on Sunday, Erdogan reiterated his unorthodox view that interest rates cause prices rises, adding that inflation would hopefully fall soon.

“Sooner or later, just as we lowered inflation all the way to 4% when I came to power, we will lower it again. But, I will not let my citizens, my people, be crushed under interest rates,” Erdogan said.

Annual inflation fell to around 4% in 2011, when Erdogan was prime minister. It has been edging upwards since 2017 and in November jumped 3.5% on the month and 21.3% on the year.

Many Turks have said a 50% hike in the minimum wage announced by Erdogan on Thursday – and widely expected to boost consumer price inflation by 3.5 to 10 percentage points – will be insufficient.

Speaking on Sunday, Erdogan said Turkey’s problems were due to “unreasonable attacks” on the economy and dismissed calls for capital controls as “ridiculous”.

“The limited rate cuts we have done cannot be the cause of this picture,” he said.

Exchanges rates were the “weapon of the game being played on Turkey”, and once they and prices were stabilized, “we will see the doors of a much bigger, modern Turkey open to us within months.”

MOUNTING CRITICISM

Under pressure from Erdogan, the central bank has cut rates by 500 basis points since September. He says the model will boost exports, employment, investments and growth.

On Saturday, Turkey’s largest business group TUSIAD called on the government to abandon the low rates policy and return to “rules of economic science”.

Opposition parties want immediate elections but Erdogan, in power for 20 years, has dismissed this call. National elections are scheduled for mid-2023.

On Sunday, he called TUSIAD’s statement an attack on the government.

“Our government’s economic policy is advancing exactly as we determined, apart from temporary volatility in exchange rates,” he said. “I call on all my citizens to stand with their state and government more strongly over the economy.”

Thousands protested in Istanbul and the southeastern city of Diyarbakir at the weekend over the surging cost of living.

Some ferry lines operating from and in Istanbul were halted on Sunday over unsustainable costs stemming from the lira crash, operators said.