Turkish central bank affirms commitment to tight monetary policy
Fatih Karahan, governor of the Central Bank of the Republic of Türkiye (CBRT), said Wednesday that they will maintain a tight monetary policy stance until a permanent fall in inflation and price stability is achieved.
Speaking at the German-Turkish Chamber of Commerce and Industry (AHK) Economy meeting, Karahan stated that the economic and trade relations between Germany and Türkiye contribute to mutual prosperity and growth, News.Az reports, citing Anadolu Agency.
Stating that the developments in the markets last week caused value losses in financial assets, Karahan said: “We took swift action to ensure that the volatility in the market is temporary and its reflections on the economy are short-term.”
Pointing out that they have proactively taken and will continue to take every necessary step by staying within the market rules, Karahan said: “We use our tools effectively to maintain the stable functioning of the markets. We keep our two-way communication channels open at all times.”
Underlining that the CBRT has a very broad and powerful toolkit, Karahan said: “We resolutely maintain our tight monetary policy stance to ensure price stability, which is our main objective.”
Stating that economic activity recovered in the last quarter of last year, Karahan continued: “In this period, household demand for goods remained strong as a result of the demand brought forward due to campaigns and upcoming wage updates. Thus, private consumption increased quarterly. Throughout the year, the positive contribution of net exports came to the fore with a significant decline in the contribution of domestic demand to growth. After declining in the second and third quarters of 2024, industrial production started to increase again in the last quarter of the year. As of January, it continues to rise on a quarterly basis.
The Services Production Index also showed a similar but more moderate recovery in the last quarter of 2024. As you know, this index is also directly related to demand in the services sector. The index pointed to a flat course in demand for services throughout 2024. The strong increase in the services production index in January was driven by sectors with a relatively weaker relationship with consumer demand and consumer prices, such as professional, scientific, and technical activities and information and communication.”
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