Central Bank Governor Karahan: "The Disinflation Process Will Be Continued with Determination"

The President of the Central Bank of the Republic of Turkey (CBRT), Fatih Karahan, spoke today at the Istanbul Chamber of Industry's (ISO) regular council meeting for November.

In his statements, Karahan highlighted the tight stance of monetary policy, asserting that this policy would be maintained decisively to ensure the continuation of the disinflation process. He emphasized that the anticipated output gap, which is expected to occur at negative levels in the upcoming period, will be an important component of the disinflation process.

Leading indicators for November suggest that monthly rental inflation will slow in the fourth quarter. The CBRT President noted that the services excluding rent have noticeably slowed, which is a positive development for price stability.

Regarding the decline in KKM accounts and inflation expectations, President Karahan indicated that KKM accounts had decreased to 38 billion dollars by mid-November. He mentioned that this situation is a sign of the balancing process in domestic demand. Additionally, he stated that the policy interest rate would be set considering inflation developments and expectations to ensure the required tightness for the projected disinflation process.

The President added that macroeconomic indicators are progressing in line with the disinflation process and that while the main trend of inflation is improving, it is slower than anticipated. He noted that the continuation of the disinflation process will establish price stability, thereby increasing predictability.