Inflation will soon ease: Central Bank governor

ANKARA

The country will see the cumulative effects of its current monetary policy in the first half of the next year, Central Bank Governor Şahap Kavcıoğlu said on Dec. 2, adding that the soaring inflation will ease soon.

“Turkish companies’ investment appetite and employment expectations have reached high levels compared to previous years,” Kavcıoğlu said during his presentation at a virtual meeting with local investors.

The governor later in the day held a similar meeting with a group of foreign investors.

“When the rising commodity prices and the factors originating from the supply chain disappear, inflation will decrease,” Kavcıoğlu told local investors, adding the growth rate of commercial loans is 8 percent annually, below the averages of the previous years.

He also said that the Central Bank had “limited space left for interest rate cut.”

“There is an unrealistic and unhealthy price formation in the foreign exchange market,” Kavcıoğlu said. “The Central Bank’s intervention in the market is aimed at eliminating volatility.”

The Turkish Lira recovered to 13.42 versus the U.S. dollar yesterday after hitting a record low 14.0 on Nov. 30.

“The Central Bank of the Republic of Turkey directly intervenes in the market via selling transactions due to unhealthy price formations in exchange rates,” the bank said in a statement on Dec. 1.