Turkey’s President Recep Tayyip Erdogan called for the central bank to continue cutting its main interest rate to below 10% by year-end, defying investors and economists who say rate increases are needed to tame inflation raging above 80%.

“The interest rate has been lowered to 12%,” Erdogan said in a live interview with CNNTurk television late on Wednesday, referring to a surprise 100 basis-point cut in the benchmark one-week repo rate earlier this month. “From now on there is no going up, it will fall further. That will also reduce inflation.”

Erdogan said he hopes the monetary authority will deliver further reductions to the policy rate in October and beyond, so that the benchmark reaches single digits by the end of the year.

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Erdogan has long championed low borrowing costs, advocating an unorthodox theory that cutting interest rates results in lower inflation, the opposite of conventional policy. He has fired three consecutive central bank governors in the last four years over disagreements about the appropriate level for interest rates.

Source: Bloomberg