ANKARA — Turkey's deputy prime minister reaffirmed Monday that the government, despite holding that lower interest rates could attract more foreign investments, had no intention to intervene in the Central Bank's policies.
Bülent Arınç's statements came amid alleged tension between the government and the Central Bank over the country's policy rate, which was lowered by 50 basis points on May 22 despite Prime Minister Recep Tayyip Erdoğan's repeated calls for a sharper drop.
"As you all know, the independence of the Central Bank is one of the basic principles mentioned in the founding manifesto of our party. We have neither deviated from this principle so far, nor we have any intentions to do so in the future," Arınç said.
On May 22, the bank cut its main interest rate to 9.5 percent from 10 percent while leaving other rates unchanged. After a sharp increase in interest rates in January, Erdoğan and business leaders called on the bank to lower them, citing higher-than-expected growth figures and economic indicators.
Arınç said the fourth article of the law on the Central Bank orders the bank to support the growth and employment policies set by the government.
"We think that lower interest rates will result in a significant increase in investments and will prompt foreign and domestic investors to be more ambitious. However, when we look at the picture, it is possible to see a uniformity and accord in the Central Bank's decisions," he said.
Arınç also ruled out claims that the government mulled removing Erdem Başçı, the Central Bank governor, from office.
- Children kidnapped by PKK
Speaking to press following the weekly cabinet meeting, Arınç condemned Gültan Kışanak, mayor of the southeastern Diyarbakır province, for disallowing the families of children reportedly kidnapped by the PKK terrorist organization in Turkey to stage sit-ins in front of the municipality building.
"Diyarbakır Municipality moved these families from their original protest site and compelled them to go somewhere else just because they did not want this peaceful demonstration to make headlines," Arınç said.
Diyarbakır Mayor Kışanak is the co-chair of pro-Kurdish Peace and Democracy Party, which is accused by the government to have links with PKK.
The sit-ins in Diyarbakır occurred after the PKK reportedly kidnapped an unknown number of children on April 23, the national day for children, threatening to destabilize a delicate 'solution process' to end terrorism and address the issues of minorities, particularly those of the Kurdish minority which is by far the largest accounting for 18 percent of the population.
"Peace and Democracy Party and whoever else wants to contribute to the solution process should do their best to bring those kids down from the mountains," Arınç said.