Short-term indicators and the medium-term outlook show that disinflation in Türkiye will continue, the central bank chief said on Friday, a day after the monetary authority lowered its policy interest rate.
Tight monetary policy will ensure that this disinflation continues, Central Bank of the Republic of Türkiye (CBRT) Governor Fatih Karahan said, noting that high growth in private consumption had slowed down.
Thursday's rate cut of 150 basis points to 38%, which was at the dovish end of expectations, followed data in the last two months suggesting that disinflation is back on track after summer price pressure.
"Both short-term indications and the medium-term outlook show that disinflation is continuing and will continue," Karahan said at an event of the Turkish Industry and Business Association (TÜSIAD) in Ankara.
High growth in private consumption had slowed and household inflation expectations will continue to decline, he said, adding that policy will be tightened if the inflation outlook deviates from interim targets.
Data this month showed consumer prices rose 31.1% year-over-year in November, with a 0.87% monthly increase, both readings below expectations and helped by easing food prices. Inflation had been above forecasts in August and September, but below them in October and November.
Last month's reading market the lowest level since November 2021. It has eased from the peak of about 75% in May last year.
After a policy reversal earlier this year due to market volatility, Türkiye's rate-cutting cycle resumed in July with a 300-basis-point move, followed by cuts of 250 points and then 100 in October amid rising food prices.
Analysts expect the central bank to continue easing next year.
The CBRT's end-2025 inflation target stands at 24%, with its forecast range at 31%-33%.
It has pledged to reach its 16% interim target by end-2026 – the same target included in the government's medium-term program. The bank projects next year's inflation between 13% and 19%.
