Tight Monetary Policy and Inflation Statement from the Central Bank

Central Bank of the Republic of Turkey Governor Karahan stated that energy prices have slowed down the disinflation process and announced that the tight monetary policy stance will be resolutely maintained until price stability is ensured.

Impact of Energy Prices on Disinflation

It was stated that core goods inflation declined from 19.9 percent to 15.9 percent, and weak demand conditions limited cost increases.

It was reported that the annual price increase in the energy group materialized at 46.1 percent and the loss of momentum in disinflation stemmed from geopolitical risks.

Inflation Expectations and Prudent Stance

It was stated that supply-side developments and domestic demand conditions will be decisive in the course of inflation in the upcoming period.

It was emphasized that the improvement in inflation expectations foreseen at the beginning of the year has not been achieved yet and this poses a risk.

Developments in Turkish Lira Deposits

It was announced that domestic residents' tendency towards the Turkish lira continues to remain strong and the share of TL deposits has exceeded 61 percent.

It was recorded that a large portion of the outflows from money market funds were directed directly to deposit accounts.

Process of Increase in Gross Reserves

It was announced that gross reserves rose to the level of 171 billion dollars as of September 25 after declining due to the impact of the war.

The information was shared that net reserves excluding swaps stood at the level of 40 billion dollars as of the same date.