2024-01-15 14:29:36
by Nevzat Devranoglu and Jonathan Spicer
ANKARA, Jan 15 (Archyde.com) – Turkish Central Bank Governor Hafize Gaye Erkan told investors’ meetings last week in New York that the bank would continue to remain vigilant on inflation, news reports said. participants.
According to participants in the meetings last Thursday and Friday, Hafize Gaye Erkan clarified that monetary tightening would be maintained as long as necessary to ensure lasting price stability, reinforcing the newfound confidence of some investors in Turkish assets.
Inflation soared to almost 65% year-on-year last month in Turkey and is expected to continue rising until mid-2024, at which point aggressive monetary tightening should start to bear fruit.
President Recep Tayyip Erdogan appointed Hafize Gaye Erkan, a former Wall Street banker, as governor last June to resolve the inflationary crisis triggered by the very accommodative monetary posture of the Turkish Central Bank.
Hafize Gaye Erkan reportedly told investors that the bank reduced its pace of monetary tightening in December because rates would be very close to the level required to trigger a process of disinflation, and that the cycle would end “as soon as possible.”
A US investor who attended the meeting said he felt “rather optimistic regarding (his) exposure to Turkey” given the credibility of the new team at the helm of the central bank.
“Erdogan can still derail everything at any time, if that is his wish, but there will be no elections before 2028. So it will be possible, in the meantime, to do the heavy lifting needed to get the economy back on its feet,” the investor said.
INVESTOR INTEREST
The central bank declined to comment on Hafize Gaye Erkan’s remarks during meetings at JPMorgan headquarters in New York.
Some 300 people, including representatives from Fidelity, Artisan, Goldman Sachs, Blackrock, UBS and Morgan Stanley, attended the event, according to attendees and organizers.
Archyde.com reported this month that investment giants Pimco and Vanguard returned to the Turkish market late last year due to its return to monetary orthodoxy.
The central bank has increased its one-week repo rate by 3,400 basis points since the appointment of Hafize Gaye Erkan in June.
The governor raised the policy rate by 250 basis points to 42.5% on December 21 and analysts expect another increase this month. Inflation is expected to peak around 70-75% in May before falling.
Top Turkish politicians will not attend the annual meeting of the World Economic Forum this week in Davos, Switzerland, a source familiar with the matter said on Monday. (Reporting by Nevzat Devranoglu, with the help of Jonathan Spicer in Istanbul, French version Corentin Chappron, edited by Sophie Louet)
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