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Central Bank Governor: War's Effects Visible in April Inflation
🇹🇷 Turkey /Economy & Trade

Central Bank Governor: War's Effects Visible in April Inflation

From Cumhuriyet · (8h ago) Turkish

Translated from Turkish, summarized and contextualized by DistantNews.

TLDR

  • Central Bank of Turkey (CBT) Governor Fatih Karahan stated that the effects of the war are clearly visible in April inflation data.
  • Karahan emphasized that while significant progress has been made in disinflation, inflation remains high, and the CBT will not allow the medium-term outlook to deteriorate.
  • He noted that rising energy prices are putting pressure on both inflation and the current account deficit, but the tight monetary policy stance will continue.

Governor Fatih Karahan of the Central Bank of the Republic of Turkey (CBT) delivered crucial economic insights at the Participation Finance Summit in Istanbul, organized by the Participation Banks Association of Turkey and Anadolu Agency. Karahan underscored the CBT's primary objective: achieving price stability. He directly linked the observed inflation figures for April to the ongoing global conflict, stating that the war's impact is unequivocally reflected in the data.

Enflasyonda orta vadeli görünümün bozulmasına izin vermeyeceğiz

— Fatih KarahanCentral Bank of Turkey Governor Fatih Karahan's statement on not allowing the medium-term inflation outlook to deteriorate.

While acknowledging the progress made towards disinflation, Karahan did not shy away from the reality of persistently high inflation. He issued a firm commitment, asserting that the bank will not permit a deterioration of the medium-term inflation outlook. The governor highlighted the dual pressure exerted by rising energy prices, which affect both inflation rates and the current account balance. Despite these challenges, Karahan signaled a continuation of the tight and cautious monetary policy stance, emphasizing its necessity for economic stability.

Enerji kaynaklı etkilerin kısa vadede devam edeceğini düşünüyoruz. Önümüzdeki dönemde para politikası kararlarını alırken bu unsurları dikkatle değerlendireceğiz. Savaş dezenflasyon sürecini etkilese de kararlılığımızı değiştirmiyor

— Fatih KarahanGovernor Karahan on the short-term impact of energy prices and the war on disinflation, emphasizing continued careful evaluation in monetary policy decisions.

Karahan further elaborated on the current account deficit, noting that while risks of an upward trend are apparent, the deficit is still projected to remain below its historical average as a percentage of national income in 2026. He also touched upon the role of macroprudential tools, confirming their continued availability and increasing usage. The governor also praised the participation finance sector for its growth and contribution to financial inclusivity and deepening the system. This perspective reflects a commitment to managing economic challenges through prudent policy, even amidst external pressures like geopolitical conflicts impacting energy prices.

Para politikasındaki sıkı duruş sayesinde hizmet grubunda daha ılımlı seyir görüyoruz. Cari işlemler dengesinde de belirgin iyileşme sağlandı.

— Fatih KarahanKarahan highlighting the positive effects of tight monetary policy on the services sector and the current account balance.
DistantNews Editorial

Originally published by Cumhuriyet in Turkish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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