ANKARA (XINHUA) – Turkiye’s central bank will maintain its tight monetary policy stance until the inflation drops to a targeted level, said the bank’s new governor Fatih Karahan.
“We are determined to maintain our monetary stance to ensure domestic demand progresses towards disinflation,” he said at a news conference to present the bank’s quarterly inflation report.
Karahan added that there is currently no consideration for an additional rate hike.
Since June, 2023, Turkiye has hiked its key interest rate from 8.5 per cent to 45 per cent, and signalled last month that the tightening cycle was complete.
“At the end of May, we will enter a disinflation process where we will see a rapid decline in annual inflation,” the governor said, explaining that strong capital inflows have been seen in Turkiye.
“Our policies have started to show their effects, inflation will decrease permanently, and price stability will be permanently achieved,” he said. Karahan, former deputy governor of Turkiye’s central bank, was appointed as the bank’s new governor on February 3 after Hafize Gaye Erkan announced her resignation following allegations of nepotism.
Turkiye’s annual inflation rate rose slightly to 64.86 per cent in January from 64.77 per cent last December, according to the official data released this week.
Inflation topped 85 per cent in October 2022 and remains above 60 per cent, inflicting hardship on consumers in Turkiye. The high inflation, coupled with the depreciation of the Turkish lira, has squeezed the incomes of millions of workers and pensioners, who are struggling to make ends meet.
