Tayyip Erdogan Meets Turkey's Top Banker to Keep Up 'Trust' in Economy

Turkish President Recep Tayyip Erdogan on Wednesday met with the government's economic pointman and the central bank governor, agreeing on the need to maintain trust in the economy at talks aimed at calming markets after a plunge in the value of the lira.

Erdogan hosted Deputy Prime Minister Ali Babacan and central bank chief Erdem Basci at his presidential palace in Ankara, in an apparent attempt to heal a damaging rift over his controversial comments on monetary policy.

The president has lambasted the central bank for failing to aggressively cut interest rates to stimulate growth and his increasingly personal attacks on the respected Basci have caused the lira to fall to historic lows in value against the dollar.

In a two-hour meeting with the president, Basci gave the president a presentation on the state of the economy based on 130 slides which were also published on the central bank website (tcmb.gov.tr), the official Anatolia news agency reported.

Babacan was also present at the meeting and stayed on for another half hour of talks with the president after Basci left, Anatolia added.

Neither men made any comment after the closed-door meeting ended.

But the presidency issued a statement on its website saying Erdogan had noted the "strong foundations" of the Turkish economy and the importance of the "robust and balanced" targets set out by the president in the drive to make Turkey a top 10 global economy by 2023.

But in an apparent nod to the need for a monetary policy that will not undermine the economy, the statement added Erdogan had also emphasised the need "to maintain strictly the existing trust and stability" in the Turkish economy.

There had been rumours last month that Babacan and Basci were on the brink of resigning, a move that risked plunging Turkey into economic crisis. However they stayed in their jobs and Erdogan in his latest speeches has shied away from sharp criticism.

Erdogan wants the bank to cut rates to boost the flagging growth of the Turkish economy, which has been one of the pillars of his popularity, ahead of June legislative elections. However economists have ridiculed his comments for showing scant regard of Turkey's persistently high inflation.

The presentation slides published on the central bank website appeared to show that Basci had attempted to give Erdogan a lesson in economic theory at the meeting, showing the relationship of inflation to interest rates and its effects on Turkey's economic performance.