Short-term indicators and the medium-term outlook show that disinflation is ongoing and will continue, the governor of the Turkish central bank said on Wednesday, according to the text of a presentation made in Istanbul.
Speaking at the complex of the Turkish Exporters Assembly (TIM), Central Bank of the Republic of Türkiye (CBRT) Governor Fatih Karahan evaluated the macroeconomic outlook, reiterating the focus on price stability.
Karahan drew attention to the increase in reserves and emphasized that the balance of FX-protected accounts, the so-called KKM, is also approaching zero.
Noting that they value the progress they have made toward achieving price stability, he said: "Both short-term indicators and the medium-term outlook show that disinflation is continuing and will continue."
The annual inflation rate dropped below 31% in December, marking the lowest since late 2021, official data showed earlier this week.
According to the presentation, the CBRT chief also stated that "a widespread decline" in inflation has been observed since May 2024 and explained that rental and education items have pushed up services inflation.
However, Karahan stated that "the decline in rental inflation is expected to continue," and noted that the regulation of private school fees will also contribute to disinflation in education.
He also suggested that the indicators point "to a slowdown in the main trend" and that consumer and firm inflation expectations have also entered a downward trend.
Karahan also stated that a tight monetary policy stance will be maintained until price stability is achieved, and it will strengthen the disinflation process through demand, exchange rate and expectations channels.
The central bank is expected to convene for its first Monetary Policy Committee (MPC) meeting this year on Jan. 22.
In December, the bank lowered its policy interest rate by 150 basis points to 38%.
