Turkey’s central bank aims for disinflation in H2 2024 

Turkey central bank

Turkey will see disinflation in the second half of the year, the Turkish central bank governor Fatih Karahan has reiterated.

Ankara will maintain tight monetary conditions that will significantly lower the monthly inflation trend, he said at a meeting with the Turkish Banks Association management. 

“Our determined stance on monetary policy will enable us to successfully achieve our targeted disinflation path,” he said.

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Last month the central bank raised its key interest rate by 500 basis points to 50 percent from 45 percent following a deteriorating inflation outlook.

The move comes after monthly inflation was higher than expected in February, driven by services inflation, the monetary policy committee said.

Inflation reached 67.07 percent in February.

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Global rating agency Fitch has already upgraded Turkey’s long-term foreign currency issuer default rating to “B+” from “B”, driven by greater-than-expected monetary policy tightening to control inflation.

In February, finance minister Mehmet Şimşek said Turkey’s measures to curb inflation will prove effective and it should decline in the second half of this year.

The medium-term programme, launched in September 2023, intends to achieve price stability and single-digit inflation, he said.