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Central Bank of Turkey on thorny path to bring inflation down to 24% by year end
The Turkish regulator is facing a critical challenge to bring inflation down to 24% by the end of 2025. The national economy could suffer serious fallout unless this goal is achieved. The message is clear: all efforts must be focused on the fight against inflation.
The Central Bank of Turkey will do “whatever is necessary” to reach its 24% inflation target by late 2025, Reuters cited Governor Fatih Karahan. He also said that the central bank intends to proceed with a tight monetary policy. “We will not allow demand to disrupt the disinflation process,” Karahan stated.
Since December 2024, Turkey’s regulator has cut its key interest rate three times, by a total of 750 basis points, bringing it down to 42.5%, as annual inflation eased to 39%. However, many analysts expect inflation to remain above the 24% target by the end of 2025.
“We will do whatever it takes to achieve 24% inflation by the year end. The Bank will continue bringing it down in line with our mandate, maintaining a tight monetary stance,” Karahan said.
Karahan stressed that the central bank’s resolute stance on monetary policy will help support interest in the Turkish lira. “Our top priority when setting the policy rate is to ensure the degree of tightness needed to reach the projected disinflation path,” he added. To sum up, the Central Bank of Turkey is committed to maintaining its aggressive monetary policy until there is a “steady decline in inflation and price stability”.
© InstaFintech Group
