Top level difference of opinion on Turkish economy deepening

The difference of opinion between the president and the government, and also within the government itself, about economic policies is getting deeper. 

Following President Recep Tayyip Erdo?an?s statement last week about interest rate cuts, it was observed that the difference of opinion was not only limited to monetary policies, but had also spread to several main areas.

The Central Bank decided on the interest rate on Jan. 20, but the discussions will apparently continue. After Erdo?an?s statement, starting with Economy Minister Nihat Zeybekçi, a couple of cabinet ministers said a higher dose of interest rate cuts should have been given.

After the cabinet meeting at the presidential palace, government spokesman Bülent Ar?nç said, ?Our cabinet ministers want the Central Bank to cut rates.? This created the impression that the cabinet also wants a cut in interest rates, but at least Deputy Prime Minister Ali Babacan and Finance Minister Mehmet ?im?ek should have said, ?The Central Bank should decide itself.?

We do not know whether Babacan and ?im?ek speak to Erdo?an as determinedly as they speak to the public, but they have continued giving messages that the Central Bank should be independent.

The differences of opinion on the Central Bank?s independence and interest rates will not come to an end with this latest decision, because Babacan and the Central Bank insist on making cautious decisions on interest rates depending on the developments in the global economy, maintaining economic stability and looking out for equilibriums. On the other hand, the president and the cabinet ministers who repeat whatever he says reiterate that, ?There should be interest rate cuts absolutely and rapidly.?

The impression in the...