Erdogan appoints himself head of Turkey's wealth fund

The president will oversee financing for large state development projects

The president will oversee financing for large state development projects

During a speech to officials from his AK Party in Ankara on Friday, Erdogan also said Turkey would see the result of the central bank's independence after a substantial rate increase that was made a day earlier.

President Recep Tayyip Erdogan on Wednesday (Sept 12) appointed himself the chairman of Turkey's sovereign wealth fund and named his son-in-law and Finance Minister Berat Albayrak as deputy chairman.

Turkish Central Bank on Thursday hiked its one-week repo rate by 625 base points.

Before the move by policy makers in Ankara Thursday, the run on the currency forced the central bank to deliver some tightening where it could.

"Deterioration in the pricing behaviour continues to pose upside risks on the inflation outlook, despite weaker domestic demand conditions".

It described the hike as a "strong monetary tightening to support price stability".

Erdogan again described interest rates as a "tool of exploitation" but vowed that "we can not be taken advantage of".

The lira firmed to 6.01 against the dollar following the decision, from more than 6.4176 beforehand.

TRT World's Turkey analyst Yusuf Erim has more.


Ignoring calls for restraint from President Recep Tayyip Erdoğan, the bank raised its main short-term rate from 17.5% following weeks of pressure from worldwide investors.

The next two Monetary Policy Committee meetings are to be held in October.

The lira has fallen more than 40 percent against the dollar this year, driving up the cost of food and fuel and sending inflation soaring to 18 percent, its highest in a decade and a half.

The bank has now increased interest rates by 11.25 percentage points since late April, in an attempt to put a floor under the tumbling lira.

"Interest rates are the cause, inflation is the result. If you say ´inflation is the cause, the rate is the result´, you do not know this business, friend", he added.

The bank later said on Twitter that funding would be provided via the policy rate, the one week repo auction rate, instead of through overnight lending from September 14.

A growing crisis became acute earlier this year following the detention of an American pastor on espionage and terror-related charges, which prompted Donal Trump to double the import tariffs on Turkish steel and aluminium.

The rate rise comes on the same day as the Bank of England left the interest rate untouched at 0.75%, citing heightened risks to global growth as a result of volatility within emerging markets, as well as tensions between the U.S. and China.

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