Erdogan and the “Capitalist Logic of the West”

vAgainst the backdrop of the Lira crisis, Turkish President Recep Tayyip Erdogan criticized the current economic theory on interest as “the capitalist logic of the West” and defended his low interest rate policy. Even those close to him believed that higher interest rates could fight high inflation. “But as long as I live, I firmly believe that prime interest rates are the cause and inflation is the result,” Erdogan said on Friday.

Erdogan again used the Qur’an to defend his low interest rate policy. Islam forbids very high interest rates or savings and usury. However, scholars are divided on how a reasonable profit can be prepared. Regarding the economic turmoil, Erdogan said he was sorry the damage was done. “But it is our duty to do what is right for the good of our country and our people.”

raised more than two billion dollars

Erdogan also called on the population to feed gold savings into Turkey’s banking system. “The more of the 5000 tons that are brought into the economy, the more we are brought into the economy, the stronger we become as a country and as a people.”

As a result of the devaluation of the lira, many people in Turkey invested in alternatives such as gold. Even Turkish companies that do not trade in foreign currencies should not use any financial instrument other than the lira, Erdogan said. He said he expected “rapid normalization” given the high volatility in exchange rates and prices in the country.

Turkey’s central bank has intervened five times in the capital markets in the current month. According to the central bank, the first three times on Friday raised more than $2 billion.