Chairman of the Central Bank of the Republic of Turkey (CBT) Shihab Kavcioglu, speaking in the Disinflation Council, gave messages about monetary policy in the coming period. Kavcioglu, “We will continue to set the policy rate above inflation until strong indicators point to a lasting decline in inflation.”
“We are determined to reduce inflation to 5 percent by 2023,” Kavcioglu said, emphasizing “independence” and “effective use of monetary policy instruments” and “we will continue to use the tools at our disposal to achieve this goal independently.”
“Risks continue in global economy”
Kavcioglu made the following assessment of the crisis in the global economy due to the coronavirus epidemic:
“At this point, there is a growth in global growth and an increase in international commodity prices due to the positive developments in the expansion policy along with the vaccination process. However, the uncertainties surrounding the epidemic are still alive and well.
Kavcioglu, who is said to be in line with Erdogan’s low interest rate approach, made cautious statements about lowering interest rates contrary to expectations since taking office. In an interview with Bloomberg yesterday, Kavcioglu said that his approach to lowering the policy rate immediately was not correct.
Only four months before Kavcioglu was in office, during the Naci Agbal period, the policy rate was gradually raised from 10.25 percent to 19 percent. Agbal was fired on March 18, two days after the expected 200-point increase.
DW / GY, ET
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