Predictions on Inflation and Monetary Policy

Predictions and monetary policy in inflation cover economists’ strategies for predicting price increases and using monetary policy tools. The effects of inflation on the economy are examined.

Predictions on Inflation and Monetary Policy
Publish: 09.05.2024
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Fatih Karahan, the President of the Central Bank of the Republic of Turkey (CBRT), stated that they expect inflation to peak in May at around 75-76 percent. Karahan also mentioned that inflation would start to decrease from May onwards. He emphasized their intention to reduce inflation by balancing domestic demand and highlighted their tight monetary policy stance.

Foreign Exchange Reserves and Monetary Measures

Karahan expressed that CBRT does not have a reserve target, but they aim to adjust the reserve position in a way that will not hinder the decrease in inflation. He stated that when there is demand for the Turkish lira, it creates an opportunity to accumulate reserves, emphasizing that they act in a way that will not harm the inflation target. Additionally, he mentioned that in the future, if there is demand, banknotes of 500 and 1000 Turkish lira could be printed, and this decision was made based on macroeconomic and technical evaluations.

Providing information about the course of inflation with the statement “We will see the peak of inflation in May,” Karahan explained that the high inflation is influenced by base effects from the previous year and low electricity tariffs. He also highlighted the importance of additional measures in fiscal policy, mentioning the possibility of saving in public expenditures and the necessity of determining the targeted papers.

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