Central Bank announced! The road map for 2024 in the economy has been announced

The Central Bank of the Republic of Turkey (CBRT) shared the Monetary and Exchange Rate Policy Report for 2024 with the public.

The report stated that the main aim of the CBRT is to ensure and maintain price stability.

Emphasizing that monetary tightening will continue, the report said, “Measures can be taken to reduce the impact of tightening financial conditions on low-income segments.”

The following was noted in the Monetary and Exchange Rate Policy Report for 2024:

“Within the framework of the inflation targeting regime, the inflation target determined together with the Government has been maintained at 5 percent. The uncertainty range, which is an element of the CBRT’s accountability, has been maintained at 2 percentage points in both directions around the target, as in previous years. Monetary policy inflation will be maintained at this rate in the medium term. will be created to reach the target.

The indicators that are expected to guide economic units regarding the course of inflation in the future are inflation forecasts in the short term and inflation targets in the medium term. The estimates announced in the Inflation Report will be used as an intermediate target to serve as a reference for inflation expectations.

“THE OPEN LETTER WILL BE WRITTEN TO THE GOVERNMENT”

Comprehensive evaluations of inflation developments during the year will be shared with the public through the Inflation Report. If the inflation at the end of the year falls outside the uncertainty range, an “Open Letter” will be written to the Government in accordance with the principle of accountability.

The one-week repo auction interest rate will continue to be the main policy tool of the CBRT.

The monetary tightening process has been initiated in the second half of 2023 to establish disinflation as soon as possible, anchor inflation expectations and control the deterioration in pricing behavior.

The level of monetary tightness required for the permanent establishment of price stability will be maintained as long as necessary to bring inflation to the path envisaged in the Inflation Reports and to the 5 percent target in the medium term.

“TIGHTENING STEPS WILL CONTINUE INCREASINGLY”

Monetary tightness and monetary transmission can be supported by quantitative tightening decisions by closely monitoring liquidity developments. Quantitative tightening steps will continue by increasing the variety of sterilization tools used.

Monetary policy decisions, detailed analysis of macro and micro level prices, inflation expectations and pricing behaviors, demand elements that monetary policy can affect, supply-side developments, internal-external balance, financial conditions including savings tendency and loans, and all other factors affecting liquidity and price stability. It will be created taking into account the developments in the elements.

The seven-day period before the Monetary Policy Committee (MPC) meeting is called the “silent period” and no external communication regarding monetary policy is made during this period. During this period, units that provide technical input to the decision-making process make comprehensive analyzes and evaluations to the MPC in preparation for the MPC meeting.

MPC will hold 12 meetings in 2024 within the framework of a previously announced calendar. The monetary policy decision and its brief justification, together with its English translation, will be delivered at 14.00 on the same day as the meeting; The meeting summary, which includes detailed evaluations of the MPC, will be published on the CBRT website within five business days following the meeting.

“Monetary policy communication will continue in line with the principles of transparency, accountability and predictability.”