Central Bank of the Republic of Turkey (CBRT) Governor Erdem Başçı said that the minimum wage increase from the current TL 1,000 ($342) per month to TL 1,300 ($446) per month, which will happen in the beginning of January, is expected to have an inflationary impact on the economy due to its stimulating effect on domestic demand. Başçı said that raising the minimum wage is expected to push inflation up by 1.5 points, raising the forecast inflation rate to 6.5 percent from 5 percent in 2016. Stressing that the primary mission of the CBRT is to achieve price stability, Başçı said that in this framework the inflation target set for 2018 is 5 percent – as is 2016 and 2017. Also, Başçı announced the uncertainty band of 2 percentage points in both directions. Furthermore, Başçı pointed out that the government and the CBRT must collaborate when determining the inflation target to succeed in achieving the target set. Meanwhile, inflation in Turkey rose to an annual 8.1 percent in November from 7.58 percent in October, the Turkish Statistical Institute reported on Dec. 3.In addition, Başçı underlined that the recent decrease in fruit and vegetable prices this month has had a deflationary effect on the overall economy as a result of the crisis between Turkey and Russia, which led Russia to impose sanctions on Turkish goods. According to the Agriculture Ministry of Russia, the country will no longer permit the import of fresh fruit and vegetables, which accounts for about $1.27 billion of Turkey's annual revenue, resulting in a surplus of goods in Turkey, where the prices of these products have already been reduced dramatically in grocery stores.In a press conference in Ankara to announce the Central Bank's Monetary and Exchange Rate Policy for 2016, Başçı said that the central bank would maintain its tight monetary policy while ensuring foreign exchange liquidity.Moreover, Basçı did not address potential plans to narrow the difference between Turkey's one-week lending rate and the overnight lending rate, known as the interest rate "corridor." The CBRT announced these plans on Aug. 18, but has not disclosed further details.The governor also addressed current U.S. interest rates, which are expected to rise in December, as well as the fallout of the European Central Bank's stimulus program. Başçı emphasized that the Central Bank is taking preparative measures to deal with the potential repercussions of both, noting, "Measures that have been taken are increasing the resilience of the Turkish economy against external shocks."Lastly, according to Başçı, improvement in the current account balance will continue as a result of falling oil prices arising from high levels of oil supply, as recently agreed upon by OPEC countries. The country's 12-month rolling current account deficit stood at $40.6 billion, or about 5 percent of the gross domestic product (GDP), at the end of September 2015.Commission to determine burden-sharing for minimum wageThe Minimum Wage Determination Commission will organize its second meeting in order to determine the minimum wage that will be put into effect in 2016. The commission will consist of 15 people including state representatives, employers represented by attendants from the Turkish Confederation of Employer Associations (TİSK) and employees represented by participants from the Confederation of Turkish Trade Unions (TÜRK-İŞ). The members of the commission from the Development Ministry, Turkish Statistical Institute (TurkStat) and the Undersecretariat of Treasury will evaluate recent data regarding the economic situation in Turkey and present their findings.During the meeting, which will have a significant impact on millions of workers in Turkey, the main agenda item will be who will assume the burden of the minimum wage hike - solely the employer or both the employer and the government together. Instead of discussing exact numbers, the new minimum wage has already been determined by the Justice and Development Party (AK Party), as it made the decision in order to fulfill its election promise. The minimum wage will be increased from TL 1,000 ($346) to TL 1,300 per month, the direct result of the AK Party's successful gain of the required number of seats to form a single-party government after the Nov. 1 election. However, this move is worrisome for business owners concerned about rising costs. The proposed increase will mean an additional financial burden of TL 30 billion for employers.