The CBRT will hold its Inflation Report meeting on July 27. The central bank had predicted that inflation would close the year at 22.3% in the previous reporting period. However, there are indications that the actual rate of inflation may exceed this projection, prompting the need for action to combat inflation and stabilize the economy.
There are several risks that contribute to inflationary pressures, such as tax increases, minimum wage increases, exchange rate fluctuations, deterioration in expectations and behavior, and rigidity in services inflation. Considering the current risk environment in terms of inflation, it is seen that the CBRT preferred to increase interest rates gradually. It is important that the CBRT continues its tightening monetary policy in order to eliminate inflationist concerns and keep inflation under control. The communication of the central bank's gradual approach to this situation and its potential impact on the macro/micro prudential framework will be discussed in more detail at the Inflation Report meeting to be held on 27 July.
The course of CBRT Inflation Report forecast updates and year-end inflation rate comparison... Source: TurkStat, CBRT, Dinamik Yatırım
In summary, the CBRT is aware of the importance of taking measures to combat inflation and stabilize the economy. In this framework, it seems likely that the Central Bank will continue its policy of gradually increasing interest rates until inflation is brought under control. The features of this approach and its implications for the broader economic framework will be discussed at the upcoming Inflation Report meeting.
The year-end inflation forecast, which was 22.3 percent in the previous report, is expected to be revised upwards. According to some economists, the CBRT's 2023 inflation expectation may be updated as 40%. Many economists already expect inflation to be around 60% by the end of the year.
Kaynak: Dinamik Yatırım-Enver Erkan
Hibya Haber Ajansı
