President Recep Tayyip Erdogan said on Thursday he was determined to lower interest rates to targeted levels and described recent comments on falling central bank forex reserves as aimed at creating negative sentiment towards Turkey.

Turkey President Recep Tayyip Erdogan speaks during
Turkey President Recep Tayyip Erdogan speaks during "7th Council on Family" at Bestepe People's Congress and Cultural Center in Ankara, Turkey on May 2, 2019. (AA)

Turkey will develop and grow within the bounds of the free market system, Turkey's President Recep Tayyip Erdogan said on Thursday.

He said he was determined to lower interest rates to targeted levels.

Speaking to the Turkish Union of Chambers and Commodity Exchanges (TOBB) in the capital Ankara, Erdogan said the country will take all its steps under the framework of the principles of the free market system.

"Whoever creates obstacles to foreign or domestic investors has to answer to me," Erdogan said.

"Together, we will win this battle against those trying to trap Turkey in the exchange rate, interest rate and inflation plot," he said in a speech to business people in Ankara. "We are certainly determined to lower exchange rates, interest rates and inflation to targeted levels," he added.

The central bank governor said on Tuesday interest rate hikes remained an option if inflation unexpectedly jumps and defended the bank's reserves policy against concerns that have grown as the lira tumbled in recent weeks.

At its policy-setting meeting last week, the central bank left its key interest rate unchanged at 24 percent. Annual inflation is currently near 20 percent. 

As laid out in Turkey's new economic program announced last September, the country's inflation rate target is 15.9 percent this year, 9.8 percent in 2020, and 6.0 percent in 2021.

"All indicators show that the country is entering an upward trend," said Erdogan.

After concluding the last in a series of elections this March, Erdogan said the government is leaving behind the period of polls to focus on action.

"We will use this four-year period optimally. Our preparations for the mid- and long-term programmes are largely completed," he said.

Following local, parliamentary, and presidential ballots since 2018, Turkey is not expected to hold any more polls over the next four years.

Erdogan emphasised that the government is concentrating on structural reforms to strengthen the private sector.

Source: TRTWorld and agencies