Karahan: The Disinflation Process is on the Right Track

Forex - The President of the Central Bank of the Republic of Turkey (CBRT), Fatih Karahan, stated that the disinflation process is progressing well, with a decrease in the trend's inclination. Karahan made a presentation titled "Inflation Outlook in Turkey" during the annual meetings of the International Monetary Fund (IMF) and the World Bank held in Washington, D.C.

He pointed out that service prices and administered prices are limiting the pace of decline in inflation, indicating that backward-indexed items have pushed up service inflation. In the presentation, Karahan noted that leading indicators show a downward trend in rental inflation, stating, "Companies' pricing behaviors continue to improve. Price changes have become less likely."

The CBRT President also mentioned that inflation expectations in the real sector have improved, indicating a slowdown in economic activity and a continuing slowdown in domestic demand. Karahan highlighted that 12-month inflation expectations continue to decline.

"The share of Turkish lira deposits continues to increase," Karahan said, "Currency-protected accounts are also declining at a high conversion rate to TL. The decrease in credit rates indicates an improvement in inflation expectations." Foreign exchange reserves have rapidly increased.