Fatih Karahan, President of the Central Bank of the Republic of Turkey (CBRT), “Stability of the strict monetary policy stance, the slowdown of domestic demand, the real valuation in the Turkish lira and the improvement in inflation expectations strengthens the disinfiation process.” he said.
Karahan made a presentation titled “Monetary Policy and Inflation View in Türkiye” at the Global Appearance Forum in Washington by the International Institute of Finance (IIF).
Stating that monetary policy in Türkiye is proactive and market -friendly and carried out in coordination, Karahan said, “The risk of re -dollarization in the market was limited to a stance of a determined and strict monetary policy.” he said.
Karahan pointed out that the monetary transfer mechanism has made significant improvement in the last year.
Disinflation process continues, but the risks continue to transfer Karahan, “the main trend of inflation has improved. The decline in service inflation becomes more pronounced. Mal inflation is low, but the exchange rate will be affected by the transition.” He said.
Emphasizing that the exchange rate passenger is at a moderate level and reflects the improvement in pricing behavior, Karahan said, “Exchange rate passenger is expected to be around 35-40 percent below the level measured in the summer of 2023. Transition, lower exchange rate protection deposit (KKM) balances, improved inflation expectations and moderate demand. he said.
KKM accounts have a significant decrease in Karahan, declining oil prices supporting disinfection, but the global economic appearance is uncertain, expressing that demand, the effect of goods consumption exceeded expectations, he said.
Karahan stated that the potential effects of recent trade tensions on the disinflation process will be realized through global economic activity, commodity prices and capital currents and that the decline in commodity prices will balance some of the exchange rate -based effects.
Karahan said that the foreign exchange transaction volume was high at the historical level and said:
“Proactive, market -friendly steps supported the strict monetary policy stance. Accordingly, we started to export TL deposit procurement tenders and liquidity deeds for 8 weeks within the scope of sterilization. Within the scope of the funding cost, we first increased the lending interest rate to 46 percent in the night term. We have determined the borrowing interest rate from 46 percent to 49 percent in the night term.
Karahan, liquidity surplus turned into a revelation, he said.
“Active liquidity management strengthened the reflection of monetary transfer to market interest rates”
Karahan said that active liquidity management strengthens the reflection of monetary transfer to market interest rates and stressed that retail foreign exchange demand is more limited compared to March 2024.
Karahan, “TL outputs were mostly made of money market funds. Currently, the money market funds have been stable.” he said.
Household confidence in the safety of very little deterioration in the transfer of Karahan, despite the market volatility of cash foreign exchange was limited, he said.
“We are currently in a different situation than March 2024 because of the healing monetary transfer mechanism, active liquidity management, ongoing disinflation process and recovery inflation expectations.” he said.
Thanks to the rapid policy reaction and strong transfer of TL assets, voicing that the return of the assets, the impact of the improvement in the expectations of the expectations of return, he said.
Karahan, cost increases slowed, he added.
“The current account deficit is expected to watch at moderate levels”
Stating that the current account deficit is expected to watch at moderate levels, Karahan said that the demand for goods is more resistant and that the service demand was moderate.
Karahan, the demand side of the card expenditures lost acceleration stressed.
“Stability of the strict monetary policy stance, the slowdown of domestic demand, the realization of real valuation in Turkish lira and the improvement in inflation expectations strengthen the disinflation process. From now on, the increasing coordination in the fiscal policy will make significant contributions to this process.” Karahan, who evaluated, said that a sustainable decrease in inflation was caught and the strict monetary policy stance will be maintained until price stability was achieved.
Karahan completed his words as follows:
“In this context, the policy interest will be determined in a way that provides the tightness required by the disinflation path required by the disinflation path envisaged by taking into consideration the main trend of inflation and the main tendency of inflation.
