Turkish central bank bows to Erdogan’s pressure to cut rates

ISTANBUL (AP) — Turkey’s Central Bank has unexpectedly cut the main interest rate by one percentage point, bowing to President Recep Tayyip Erdogan’s demand for lower borrowing rates to boost growth. The bank’s monetary committee on Thursday cut the policy rate from 19% to 18% despite an annual inflation rate of 19.25%. Economists generally view higher interest rates as a curb on inflation. But Erdogan has repeatedly said the reverse. That a high rate of interest causes price rises. The decision sent the Turkish lira to a near-record low of 8.808 against the U.S. dollar.