Turkey on Wednesday officially established a new committee that will help the country’s efforts to bring down double-digit inflation, as pledged in the government’s economic reform package unveiled this March.

The Price Stability Committee, under the coordination of the Treasury and Finance Ministry, will contribute to the permanent establishment and maintenance of price stability, according to a presidential decree published in the Official Gazette Wednesday.

Treasury and Finance Minister Lütfi Elvan said the new committee’s main purpose is to develop solutions to supply shocks that pose risks of inflation.

The Turkish government has been vowing to tackle inflation, which has been stuck in double-digits for most of the last three years.

It unexpectedly dipped below 17% in May, falling from a two-year high thanks largely to limited price increases during a full lockdown in the first half of the month.

It had quickened to 17.14% in April, the highest since mid-2019, due to surging commodity prices and the sharp fall in the Turkish lira, which raised import prices.

The annual producer price index rose to 38.33% in May, which is expected to contribute to headline inflation in the coming months, as input costs are reflected in consumer prices.

Unveiling the reforms package in March, President Recep Tayyip Erdoğan said the government would focus efforts to reform Turkey’s economy on bringing down double-digit inflation.

Erdoğan announced plans to set up price, financial stability and economic coordination committees to steer the changes through.

"An agenda point of priority is the battle with inflation. The goal is single-digit inflation," Erdoğan had said.

The Economic Coordination Committee was also officially set up under the decree published Wednesday.

The committee will monitor and evaluate developments related to economic stability in order to ensure that economic policies are created and implemented more effectively in coordination with a more holistic approach, the decree said.

It will be responsible for ensuring general coordination in the field of economic policies as well as ensuring and monitoring cooperation and coordination between institutions and organizations that have responsibilities in the creation and implementation of these policies.

The committee will also monitor and evaluate developments in the Turkish economy and the global economy, as well as those regarding economic stability and development.

It would conduct impact analyses on policy practices when necessary and create sub-working groups.

The Price Stability Committee includes the Ministers of Treasury and Finance, Trade, Labor and Social Security, Energy and Natural Resources, Industry and Technology, and Agriculture and Forestry, as well as the central bank governor and the chief for strategy and budget under the Turkish Presidency.

Elvan also addressed recent views on whether the establishment of the committee was an intervention in the central bank, stressing that ensuring price stability is a responsibility of the monetary authority.

"The main purpose of the Price Stability Committee is to develop solutions to supply shocks that pose a risk to inflation. There is no intervention in the Central Bank in any way," the minister said on Twitter.

The Central Bank of the Republic of Turkey (CBRT) kept its key policy rate – the one-week repo rate – unchanged for a third straight meeting in June and adopted a more hawkish tone as a weak lira and higher global commodity prices continue to cloud the inflation outlook.

The bank said the policy stance will be maintained decisively until a significant fall in consumer prices is achieved, reiterating a pledge to keep the rate above inflation in order to cool prices.

The bank revised its year-end inflation forecast higher in April to 12.2%. It aims to bring it down to 5% by 2023.

The decree Wednesday said the price committee would put forward structural policy proposals aimed at contributing to ensuring price stability by observing the coordination between monetary and fiscal policies.

It will be responsible to determine the measures to be taken by monitoring the risks that threaten price stability and take decisions to ensure their implementation by the relevant institutions and organizations.

It will also make decisions to ensure that prices determined or directed by the public are implemented in the focus of price stability.