Inflation and Reserve Statement from CBRT Governor Karahan at TÜGİAD Meeting

Central Bank of the Republic of Turkey (CBRT) Governor Fatih Karahan stated in his speech at the TÜGİAD Ankara Meeting that monetary tightness required by disinflation will be maintained until price stability is ensured. Karahan announced that rent inflation has dropped below 40 percent and that the 30 billion dollar decline in reserves stems from changes in gold prices.

Central Bank of the Republic of Turkey (CBRT) Governor Fatih Karahan made evaluations regarding the inflation outlook at the TÜGİAD Ankara Meeting Program. Karahan stated that supply-side shocks continue to exert effects, but the slowdown in domestic demand contributes to the disinflation process, emphasizing that monetary tightness will continue decisively until price stability is achieved. Recalling that natural gas prices have risen to three times their pre-war levels, Karahan stated that thanks to the sliding scale practice and coordinated steps, declines have been recorded again starting from May.

Stating that the deceleration in annual inflation has lost momentum but the improvement in non-energy items continues, Karahan said October data points to the continuation of disinflation. Explaining that rent inflation, which was at the 66 percent level a year ago, has dropped below 40 percent, Karahan noted that this situation supports the decline in services inflation. In addition, it was reported that tight monetary policy and the moderate course of the Turkish lira limit the increase in goods inflation, while 30 billion dollars of the decline in reserves stems from changes in gold prices.