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Türkiye’s central bank will maintain its tight monetary policy stance until inflation reaches the targeted level, its new governor said on Thursday.
Speaking at a news conference in Ankara to present the bank’s quarterly inflation report, Fatih Karahan, who was appointed to the post less than a week ago, said while inflation has eased, it remained above target levels.
The bank’s year-end inflation forecast for this year and for 2025 has been kept at 36% and 14%, respectively, Karahan said.
“At the end of May, we will enter a disinflation process where we will see a rapid decline in annual inflation,” he said.
The bank predicts that average monthly inflation will fall below 2.5% for the year and around 1.5% in the last quarter of the year, he stressed.
The level of monetary tightness required for the disinflation process has been reached, Karahan said, underlining that the current policy rate level will be maintained as long as necessary.
The bank’s key policy rate is currently at 45%.
Since the last inflation report in November, real and financial indicators confirmed that the bank’s policies are right, the governor underlined.
With positive developments, strong capital inflows have been seen in the country, he said.
“We will not allow any deterioration in the inflation outlook,” said Karahan.
“Our policies have begun to show their effects, inflation will decrease permanently, and price stability will be permanently achieved.”
2023’s year-end inflation was in line with the bank’s forecasts, he stressed.
The annual inflation rate in December was 64.77%.
