Exchange Rate Move from Central Bank: Controlled Depreciation in TRY is Accelerated
Economic management has implemented a strategy to increase the speed of controlled depreciation in the Turkish lira in order to prevent sudden exchange rate shocks.
Following the contacts of CBRT Governor Fatih Karahan, who met with investors within the scope of international meetings, it was reported that the economic management has transitioned to a strategy of increasing the speed of controlled depreciation in the Turkish lira.
Details of Bangkok Contacts
Details of the closed-press meetings held by Central Bank of the Republic of Turkey Governor Fatih Karahan with international investors in Bangkok, the capital of Thailand, for the IMF and World Bank annual meetings, have been reflected in the press.
Exchange Rate Adjustment and Timing
It was reported that Karahan explained the timing of the exchange rate adjustment with the slowdown in economic activity, and stated that with the weakening of activities, the pass-through effect of the depreciation in the TRY on inflation has decreased.
Future Strategy and Goals
Emphasizing the importance of maintaining a sustainable exchange rate framework, Karahan stated that he aims to prevent his successor from feeling the need to make a major devaluation after his term ends in February 2028.
Disinflation and Real Appreciation
In a Bloomberg analysis, it was recalled that the CBRT tightly manages the decline in the TRY as part of its disinflation strategy, and with the real appreciation strategy, the monthly depreciation is kept below the monthly inflation rate.
Interest Rates and Inflation Outlook
It was noted that the one-week repo rate is 37 percent, annual inflation fell below 30 percent in September for the first time in nearly 5 years, and some economists expect interest rate cuts.