Central Bank of the Republic of Turkey (TCMB) Inflation Report information meeting was held in a virtual environment with the presentation of TCMB President Şahap Kavcıoğlu.
Explaining that they increased their 2021 year-end inflation forecast to 12.2 percent with an update of 2.8 points, Kavcıoğlu, "Compared to the previous reporting period, the update due to import prices in TL terms by 1.8 points, pushed the high course in food up by 0.4 points. The managed directed prices pulled the inflation forecast up by 0.1 points, largely due to the reflection of the SCT increase in communication services and the tax adjustment in tobacco. In addition, the stronger-than-anticipated course of aggregate demand conditions added 0.4 points to the year-end forecast of the update made in the output gap. The increase in the underlying trend of inflation increased the 2021 year-end forecast by 0.1 points," he said.
Kavcıoğlu said in the presentation, the update due to import prices in TL terms by 1.8 points and the high trend in food pushed up 0.4 points compared to the previous reporting period. About interest, Kavcıoğlu said, "Let me state clearly that there is no change in our tight stance."
"THE MOST SIGNIFICANT RISK ITEM IS INTERNATIONAL PRICES"
Explaining that the food inflation assumptions were updated upwards for 2021 and 2022, taking into account the outlook for exchange rate developments and international prices, Kavcıoğlu pointed to the course of international prices as the most significant risk factor. Stating that they did not change their assumptions regarding the foreign demand outlook, Kavcıoğlu said, "We have assumed that fiscal policy and financial policies will be determined within a macro framework in coordination with monetary policy."
"HIGH INTEREST TO CONTINUE"
Recalling that a strong additional front-loading monetary tightening was implemented in March, Kavcıoğlu said:
“Let me be very clear that there is no change in our tight stance. More importantly, we try to give a very clear message to all our stakeholders. We try to do this in a transparent and predictable way. I would be glad if you take our evaluations in this context and emphasize the point that we always express that we will not make any concessions in our firm stance. "