Turkey’s central bank governor Fatih Karahan said supply pressures had slowed disinflation despite moderating underlying price growth. His Bangkok presentation reported differing inflation expectations among markets, firms and households and described measures taken during financial stress. Bloomberg HT separately reported his statement that fund outflows had not materially weakened residents’ preference for lira assets.
Fatih Karahan, governor of Turkey’s central bank, presented the inflation outlook and recent financial stress on 14 October. He said supply pressures had slowed disinflation while underlying inflation was moderating. Karahan also said fund outflows had not materially weakened residents’ preference for lira assets.[1], [2]
Annual consumer inflation was 29.7 per cent in September, down from 75.5 per cent in May 2024. Seasonally adjusted monthly services inflation reached 1.85 per cent, its lowest level in five years. The average of six seasonally adjusted underlying indicators was 1.7 per cent for the month and 1.8 per cent on a three-month basis.[1]
Twelve-month inflation expectations stood at 23.7 per cent among market participants, 32.5 per cent among firms and 45.6 per cent among households. Karahan said expectations required caution.[1]
The central bank’s response to financial stress included faster outright securities purchases, more repo funding and eased borrowing limits and collateral haircuts. It also provided flexibility in lira reserve requirements. The credit-growth cap for small and medium-sized enterprises rose from 4.5 per cent to 5 per cent. Karahan reiterated a tight monetary stance until price stability and said decisions would follow the outlook meeting by meeting.[1]
