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CBRT Minutes Reflect Wait and See Mode, But See Disinflation Against Analyst Consensus

TURKEY

Statement Key points:

  • CBRT notes inflation coming from price distortions and supply-side factors, noting that the disinflation process should start on the back of recent measures taken with a focus on Lira stability and dollarization
  • A comprehensive policy framework review is being conducted with the aim of prioritizing Turkish lira in all policy tools of the CBRT.
  • The focus of this process will be on developing policy instruments to support the improvement of Turkish lira deposits, to increase the Turkish lira-denominated assets in the collateral structure of OMO funding, to gradually reduce the volume of swaps and to strengthen foreign exchange reserves.
  • The effects of Turkish lira liquidity developments on deposits and loan pricing, the lagged effects of exchange rate developments on inflation expectations, and the impact of the developments regarding FX-hedged deposit products on reverse currency substitution, exchange rate stability and price stability are being analyzed and necessary policy measures are being taken.
  • LINK: https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN...
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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