Central Bank head says forex, food hikes caused 2015 inflation target miss

Umut Erdem - ANKARA

Central Bank Gov. Erdem Başçı has said the main reason the 2015 inflation target could not be reached was cumulative rises in foreign exchange rates and food prices, in response to a question from a main opposition party deputy. 

“The basic reasons why the inflation target could not be achieved in 2015 was cumulative rises in foreign exchange rates and continued hikes in food prices,” said Başçı, in a response to the question from Akın Üstündağ, a deputy from the Republican People’s Party (CHP) in the western province of Muğla. 

Başçı said it was not possible to say price stability could be maintained. 

“It is key for all institutions to show their determined stance to decrease the inflation rate below the targeted 5 percent permanently,” he noted. 

Üstündağ asked why the inflation target could not be achieved in a questionnaire to Prime Minister Ahmet Davutoğlu. 

“Although the Central Bank set its inflation target as 5 percent for 2015, the inflation rate increased to 8.81 percent. How do you explain why such a big difference existed between these figures?” asked Üstündağ. 

Deputy Prime Minister Mehmet Şimşek, who replied to the questionnaire in the name of Davutoğlu, directed these questions to Başçı.