Central Bank Governor Karahan: Tight monetary policy creates costs

In his presentation at the TBMM Planning and Budget Committee, Central Bank Governor Fatih Karahan announced that the tight monetary policy brings costs to different segments of the economy and the Treasury.

Effects of Tight Monetary Policy

Central Bank Governor Fatih Karahan openly acknowledged that the tight monetary policy implemented within the scope of the fight against inflation creates costs for different segments of the economy. Karahan stated that under current global conditions, it is not possible to conduct this struggle at zero cost.

Situation of the Treasury and Segments of Society

Noting that the cost of the disinflation process manifests itself in different ways across various segments of society, Karahan stated that the Treasury experiences this situation as an interest burden. He emphasized that the process also has various effects on the real sector, wage earners, and industry.

Objective of the Disinflation Process

Stating that they are aware of these mentioned costs, Karahan argued that the disinflation policy must be maintained. He noted that past experiences show that the economy can only attain a healthy structure through low and predictable inflation.

Budget and Interest Expenditures

Evaluations regarding the Treasury's interest expenditures were also brought to the agenda at the committee. Members of parliament pointed out that a significant portion of the amount projected for interest expenditures in the 2026 budget has already been realized during the year.