New central bank president Turkey wants to continue strict interest rate policy | Economy

2024-02-04 14:37:44

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04 feb 2024 om 15:37

The new president of the central bank in Turkey, Fatih Karahan, wants to continue the bank’s strict interest rate policy. With this he wants to reduce the sky-high inflation in the country.

Karahan’s predecessor, Hafize Gaye Erkan, resigned before the weekend following being discredited. Karahan was appointed on Saturday.

Price stability is “the priority” for the central bank, Karahan said in a statement published on the bank’s website. “We are committed to maintaining the necessary monetary tightening until inflation falls to levels consistent with our target,” he further said.

In recent months, the interest rate in Turkey has increased rapidly, from 8.5 percent to 45 percent.

In recent years, Turkish monetary policy has caused a stir. For example, the central bank actually lowered interest rates under pressure from President Recep Tayyip Erdogan. Typically, interest rate increases are a means of combating inflation.

In December, prices in Turkey rose by 65 percent compared to the same month a year earlier. Policymakers at the central bank also expect that inflation has not yet reached its peak, but will rise further to around 75 percent in the coming months. By the end of the year, price increases should more than halve once more.

Erkan was the first female governor of the Turkish central bank and was appointed in June. She resigned because her father was allegedly involved in the bank’s decisions. Erkan has denied this and says she stepped down to protect her family and young child.

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