CBRT Say Some Effects of MonPol Tightening Are Starting to Be Seen

Highlights from the CBRT's summary of the October rate setting meeting:

• In the third quarter, although inflation readings were above expectations, it displayed a more positive outlook in September.
• Leading indicators suggest that the fall in the underlying trend of inflation, which started in September, strengthened further in October as cost shocks have been largely reflected in prices.
• Following the increase in demand for Turkish lira savings instruments due to monetary tightening, some effects of monetary transmission on demand are gradually appearing.
• While the year-end inflation is projected to be close to the upper bound of the forecast range provided in the Inflation Report, it is evaluated that the underlying trend in monthly inflation is on course to decline. On the other hand, geopolitical developments pose risks to the inflation outlook due to oil prices.
• Recent indicators and high-frequency data point to a quarterly slowdown in growth momentum in the third quarter.
• As of June, the measures taken to ensure the sound functioning of the banking system within the scope of the simplification process have primarily restored the flow of Turkish lira commercial loans.

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