The Central Bank of the Republic of Türkiye (CBRT) is using a determined strategy to ensure a consistently rising interest in the Turkish lira, the bank's governor said on Monday.
Türkiye recently started to implement a new economic model that prioritizes sustainable growth by achieving permanent price stability through investment, employment, production and exports, CBRT Governor Şahap Kavcıoğlu said in an article titled "Liraization Strategy" on the bank's blog.
"The liraization strategy implemented by the Bank is one of the key elements of this model," he underlined.
With this, he said, the bank has been focusing on permanent reforms that will ensure sustainable price stability within the framework of free market dynamics. "While designing its monetary policy decisions, the Bank is confronted with the Turkish economy's structural problems, particularly regarding a sustainable external balance," he wrote.
"In this process, instead of easy but temporary solutions, it focuses on permanent long-term solutions despite the difficulties in the short and medium term," he stressed, adding that this process "is also a challenge to a structural problem that has remained unresolved despite many years of efforts."
He said the bank's key priority is to resolve the problem of high currency substitution, which has been a structural problem in the fight against inflation for many years.
"Also supported by macro- and microprudential measures, the sustainability of external balance will now accompany the strong balance in public finance and thus, the objective of achieving and maintaining price stability will be fulfilled," he stressed.
Meanwhile, Türkiye's economy is projected to grow 5% this and next year, according to the country's medium-term economic program.
Gross domestic product (GDP) growth is foreseen to accelerate to 5.5% for the following two years – 2024 and 2025, according to the Turkish economy's road map for 2023-2025.
The government is aiming for GDP to hit $867 billion in 2023, $952 billion in 2024, and top $1 trillion by the end of the program.
The economy grew 7.6% year-on-year in the second quarter of this year and 7.5% in the first quarter.
Türkiye's annual consumer inflation rate, which currently stands at its peak, is officially projected to reach 65% by the end of this year, then ease to 24.9% in 2023.