Star economist backs call for Turkey's interest rate cut

Turkey's Prime Minister Recep Tayyip Erdogan’s recent call for an emergencymeeting of the monetary policy committee to cut interest rates has been backed byGoldman Sachs' former chairman, Jim O'Neil, the man who coined the term BRICSback in 2001 to describe the burgeoning economies of Brazil, Russia, India and China and recently gave us MINT to describe the world's next big economies –Mexico, Indonesia, Nigeria and Turkey.In a private interview with an Anadolu Agency correspondent, O’Neill praised theTurkish Central Bank’s original decisions to up interest rates. “I think the CentralBank did a pretty good job...The Turkish Lira actually did respond to the hike ininterest rates. It was a smart thing to do." However, he added that "since the TurkishLira is now stable, why would they not reduce the interest rate. It makes sense tome.”O’Neill commented that a lot of people had expected Turkey's economy to slowdown particularly since last summer, but said that “it doesn’t appear to be slowingas much as the main consensus would think. Turkey has got some positive sides andsome people seem to underestimate it.”Turkey's interest rates were substantially raised in January to defend the value ofthe Turkish Lira, but last week the prime minister called on the country's CentralBank to cut back interest rates to stimulate the economy. However, Erdem Basci, thegovernor of the Central Bank, dismissed these calls Monday saying, "It is better togradually decrease the interest rate. Steps should be taken without erodingconfidence in Turkey.