Turkey’s inflation expected to ‘gradually converge with economic targets,’ Central Bank says

DAILY SABAH
ISTANBUL
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The consumer price index in Turkey is expected to meet year-end targets, the Central Bank of the Republic of Turkey (CBRT) Governor Murat Çetinkaya said Friday.

"With the contribution of coordinated measures, it is expected that the inflation [rate] will gradually converge with our targets," Çetinkaya said in during his presentation titled "Macroeconomic Outlook and Monetary Policy" at the JP Morgan Investor Conference in Istanbul.

The Central Bank will continue to closely monitor the factors affecting the inflation outlook and effectively use monetary policy instruments in line with price stability, the governor added.

According to Çetinkaya, the CBRT implemented a strong monetary tightening policy to limit the deterioration in pricing behavior.

Commenting on Turkey's macroeconomic outlook, Çetinkaya said "The stabilization tendency in the economy has become evident. Economic activity has slowed down due to the tightening of financial conditions and weak domestic demand."

Credit growth continues to slow down as the recent credit growth trend currently falls below historical averages, he added.

Over the last couple of months, Turkey has seen high volatility in its currency and running inflation, and since July the country has started to take measures against these problems, laying out a comprehensive new economic program to fight problems and bring about a transformation in the country's economy.

In order to curb inflation and depreciation in its currency, the CBRT raised its benchmark rate by 625 basis points from 17.75 percent to 24 percent on Sept. 13, boosting the lira.

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