President Erdoğan signals Turkey will impose sanctions on KRG

President Recep Tayyip Erdoğan said Tuesday that one cannot separate the issues taking place in Syria and Iraq from Turkey since what happens in the neighboring countries makes an impact domestically.

Speaking to his Justice and Development (AK) Party's parliamentary group in capital Ankara, Erdoğan said: "Any incident taking place in Syria and Iraq is not independent from us, they are linked directly to our domestic affairs."
Erdoğan again criticized the Kurdish Regional Government (KRG)'s illegitimate referendum in northern Iraq that was recently held on Sep. 25.
Turkey will impose further sanctions on Kurdistan Regional Government (KRG) administration in northern Iraq over the banned independence referendum, he said on Tuesday.
He noted sanctions were so far limited, and Turkey would be willing to reach out to the Kurdish authorities in northern Iraq if they change course. Oil continues to transit from northern Iraq through Turkey.

At addressing AK Party lawmakers at weekly group meeting at parliament in Ankara, "We are managing with some embargoes in northern Iraq for now, but if they don't come to their senses, this will continue increasingly," Erdoğan urged the KRG President Masoud Barzani to cancel the referendum.

"The referendum crisis in northern Iraq is a new attempt to strike the heart of our region with a dagger. Nobody can insult a nation who grew up with the songs of Kirkuk." he said in his group meeting speech.

Ankara has strongly opposed the idea of an independent Kurdistan region. Erdoğan previously warned the KRG that the independence ambition may result in large-scale sanctions that would put Irbil in a difficult situation.

The referendum faced widespread opposition from most regional and international actors, many of whom warned it would further destabilize the region and distract from the ongoing fight against Daesh.

The illegitimate Sept. 25 referendum saw Iraqis in KRG-controlled areas -- and in a handful of territories disputed between Erbil and Baghdad, including historical Turkmen city of Kirkuk and Mosul -- vote on whether to declare independence from Iraq's central government.

According to preliminary poll figures released by the KRG, almost 93 percent of voters had cast ballots in favor of independence from Baghdad.

The illegitimate referendum had been sharply criticized by most regional and international actors, many of whom had warned the poll would further destabilize the Middle East.

- DECLINE IN INTEREST RATES
Erdoğan also evaluated Turkey's recent economic indicators, calling for a further decline in interest rates and attractive market rates for investors.

"Decline of interest rate is still not at desired point. If we cannot have the rates drop further then many troubles await us," he said.

He added that investment and employment would not increase if interest rates hover at around 20 percent.

According to Undersecretariat of Treasury, annual simple and compound interest rates were 10.56 and 10.84 percent, respectively.

Turkey's consumer prices went up by 11.20 percent in September compared with the same month last year, according to the Turkish Statistical Institute (TurkStat).

In September, the monthly rate of change in the consumer price index was 0.65 percent, up from 0.52 percent in August.

The annual increase in consumer prices was 10.68 percent in August, which increased by 7.29 percent since December 2016.

Since the beginning of this year, the annual inflation saw the lowest level in January -- 9.22 percent -- and hit the highest level at 11.87 in April.

The government aims to reach 5 percent inflation in 2020, down from 8.5 percent in 2016, and is predicted to be at 9.5 percent by the end of 2017, in accordance with the country's medium-term program announced on Sept. 27.