CBRT Governor Karahan Discusses Deposit and Interest Rates
Central Bank President Fatih Karahan has expressed optimism about the future of inflation in Turkey. He stated that with the maintenance of a tight monetary stance and the weakening of services inflation rigidity, the decline in the main trend of inflation will continue into 2025.
Karahan emphasized the importance of rent in feeding the inertia in services inflation, noting that it remains a significant factor. He also highlighted the slowdown in domestic demand and the negative output gap as important components of the disinflation process.
While inflation expectations remain high, they are gradually decreasing. Karahan acknowledged that although services inflation continues to slow down, price increases in this group remain strong compared to core goods, which is pushing headline inflation upwards.
Looking ahead, leading indicators suggest a decline in the rent inflation rate in the coming months, providing further assurance that the disinflation process will continue. Karahan concluded by stating that there is still some distance to go in achieving price stability, but the Central Bank will continue its determined stance in monetary policy to ensure a steady decrease in inflation.
