TURKISH Prime Minister Tayyip Erdogan has said interest rates are still too high and should be lowered, despite the central bank cutting its main interest rate by a total of 175 basis points since May.

“I find the current level of interest rates high. They should further come down,” Erdogan told a rally in the town of Bilecik, a week after the central bank trimmed its main one-week repo rate for a third consecutive month.

Erdogan has repeatedly called for lower borrowing costs to maintain economic growth.

Meantime, the Central Bank of Turkey left its inflation forecasts unchanged for this year and painted a rosy picture of the outlook for growth, the strength of the lira and the current account deficit (CAD) in comments that have been interpreted to be a signal of further rate cuts.

Bank governor Erdem Başçı said the bank left its mid-point forecast for 2014’s year-end inflation at 7.6 percent in its latest quarterly report, which is unchanged from three months ago but still well above its target rate of 5 percent.

It left the 2015 year-end inflation mid-point forecast at 5 percent, Başçı said at a news conference in Ankara.

The lira had stabilized and the impact of exchange-rate volatility on inflation had started to taper off starting from the second quarter, he said, with a recent drought keeping food prices high despite a downward trend in core inflation indicators.

“This sounds like a dovish Başçı. … This seems like getting ready for more cuts this year, [which] will dovetail with the political calendar,” said Timothy Ash, the head of emerging markets research at Standard Bank in London.

“Başçı said inflation maybe beyond the central bank’s control, so the bank may have to review the inflation target in 2015 up. … So this is opening the way for much more rate cuts than priced in by the market,” Ash added.