As Turkey's inflation rate enters the double digits again, the likely policies to be implemented in response by the Central Bank of the Republic of Turkey (CBRT) have dominated the country's economic agenda.
Addressing the inflation issue, CBRT Governor Murat Çetinkaya has said that the outcome of the CBRT's tight monetary policy will be more evident soon and inflation will gradually drop.
Speaking to Anadolu Agency (AA), Çetinkaya said that the CBRT's measures would not have an immediate impact but will rather be evident after a couple of quarters.
"It is necessary to take the delayed exchange rate impact into consideration. Our calculations demonstrate that the impact of the exchange rate on inflation will last longer than a year. The currency volatility, which peaked in the last quarter of 2016, is still affecting inflation movement," he said.
The CBRT governor added that they remain hopeful that a significant part of cost-oriented effects will begin to disappear in the coming months.
Çetinkaya pointed out that a steadfast implementation of the monetary policy, with a focus on inflation, is a prerequisite for price stability. He also noted that the CBRT will closely monitor the factors affecting inflation and continue to maintain a strict monetary policy until the inflation outlook is consistent with the targets.
Pointing to the Food Committee's studies and the real sector risk management project as valuable examples in this context, Çetinkaya said this strategy will yield lasting results in terms of price stability in the middle and long-term, which is the CRBT's main objective.
Recalling that there have been significant supply shocks in food prices this year, the CRBT governor said: "With the contribution of measures taken by the Food Committee, we expect normalization here next year. In addition, serious progress has been made in terms of the coordination between monetary and fiscal policies. It appears that budget sizes and measures cited in the Medium-Term Program [MTP] will not put a significant burden on inflation."
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