Turkey’s Monetary Policy and Risk Management

By Karin Strohecker

WASHINGTON (Reuters) – Turkey’s deputy central bank governor, Hatice Karahan, stated on Wednesday that monetary policy tightness will be the main risk management tool to navigate current volatility.

> “The main thing here for us in this turbulent time is giving the message about our strong monetary policy stance,” Karahan said at an Institute of International Finance event on the sidelines of the IMF/World Bank meetings in Washington.

Karahan emphasized that the tightness of monetary policy will be crucial to overcoming these volatile periods.

The IMF recently lowered its global economic growth forecasts for this year and the next, attributing it to record-high tariffs in the United States and the likelihood of a trade war.

Karahan mentioned that Turkey’s commitment to spending targets will help drive disinflation. The annual consumer price inflation in Turkey decreased to 38.1% in March, down from a peak of around 75% last May.

> “It is important to get the fiscal support from the government,” Karahan noted.
> “We expect to see further support in the disinflation process from the fiscal side, considering the strong commitment of the government to the medium-term program and fiscal targets,” she added.