Nov 02 2017

Central bank taking inflation too lightly, Gürses says

Turkey’s central bank is taking the threat of inflation too lightly and is trying to “free wheel” with monetary policy because it is not able to apply it in a timely manner, said Uğur Gürses, a columnist for Hürriyet newspaper.

At the release of the central bank’s quarterly inflation report on Nov. 1, its governor, Murat Çetinkaya, said monetary policy was tight enough to achieve inflation goals, but at the same time the 5 percent target will not be reached before 2020, Gürses wrote.

Just imagine you are looking at Turkey from outside. When a central bank with a 5 percent inflation target indicates that it will not meet the goal for more than two years, you would read it as it saying: “I have no intention to keep to my target"

Inflation accelerated to 11.2 percent in September. Core inflation, which strips out energy, food, beverages, tobacco and gold, rose to 10.9 percent, the highest level in a decade. While the central bank says the rate will gradually decline towards its target, that goal now appears largely symbolic.

Read the full article in Turkish here

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