09 February 2017•Update: 09 February 2017
By Muhammed Ali Gurtas
ANKARA
Turkey has implemented comprehensive and robust monetary tightening to contain rising inflation, Central Bank Governor Murat Cetinkaya said Thursday.
“We have increased the overnight repo and late liquidity window rates, delivering strong monetary tightening in order to contain the deterioration in the inflation outlook,” he said in comments to a conference in London carried on the bank’s website.
“We have also stated that inflation expectations, pricing behavior and other factors affecting inflation will be closely monitored and, if needed, further monetary tightening will be delivered.”
He added: “This is a clear and stable policy tightening which will be preserved until we see a considerable improvement in medium-term inflation dynamics.”
Inflation could continue to rise in the short-term before gradually falling to 8 percent by the end of the year.
Cetinkaya also highlighted the resilience of the Turkish economy to persistent shocks in recent years.
“The resilience of growth in recent years can be attributed to factors such as prudent macro-prudential policies reducing the sensitivity of economic activity to capital flow volatility, dynamic domestic market, market flexibility of exports and the fall in energy prices,” he said.
Although GDP contracted in the third quarter of 2016, more recent data has suggested that this will be short-lived and economic activity will recover moderately, Cetinkaya added
