Despite the turmoil of the market, Türkiye holds the hope of controlling inflation

Turkish central bank governor Fateh Qara Khan expressed its optimism about the prospects for inflation, despite the issuance of more expected data in light of the disorders in the markets, which indicates that investors may have accelerated their expectations related to interest rates. This came after a sudden judicial decision against the main opposition party Tuesday, which led to a wide wave of assets in Türkiye, followed by the next day’s data, showed a higher inflation than expected in August. These developments quickly urged Wall Street to reconsider their expectations about the new interest reduction cycle, suggesting that the interest reduction at the September 11 meeting will be less serious. Also read: Turkish origin falls after the overthrow of a prominent opposition leader who is expected to delay Turkish inflation, but Qara Khan said in an interview with Bloomberg on Thursday that the detail of inflation data for August and the results of growth in the second quarter indicate a decrease in the price pressure. He explained in a statement from Istanbul that “the total growth of gross domestic product exceeded expectations, but the details of the data showed that the conditions of demand still support the path of slowdown.” Despite the registration of a quarterly growth of 1.6% in the second quarter, which is higher than estimates, he pointed out that special consumption recorded a contraction for the second quarter in a row. While the inflation rate in August to 33% compared to 33.5% in the previous month, it remained higher than expected. However, Qara Khan emphasized that the basic indicators that reveal the general direction “provide a more accurate assessment.” He believed that these indicators show that the frequency of high prices is still declining, adding that the central bank carefully monitors the impact of rental increases and education costs on inflation expectations. The Turkish interest path has reduced the central bank in July with more than expected, from 46% to 43% in the first Tayaysyer in four months, indicating more reduction in the road. Also read: Major projects in Istanbul stumbled with the ongoing political turmoil, but a judicial statement to isolate the Istanbul administration of the Republican People’s Party, the most prominent opposition parties, raising the concern of investors. This decision was preceded by a series of legal issues associated with the opposition, and coincided with the issuing of disappointing economic reports, which urged Wall Street banks to present a slow pace of interest reduction. In response to a question whether the state of political blur affects the vision of inflation in the central bank, Qara Khan said: “We have not allowed the decline in inflation to weaken expectations or demand, and we will not allow it in the future.” “We would like to maintain the profits we have achieved in the reserves, the current account balance and other important areas such as the issue of dollars,” he added. The purpose of inflation last month has a minor modification of its prescriptions regarding inflation as it retained its goal for the end of the year at 24%, but at the same time indicated that the actual level within a series could end between 25%and 29%. Qara Khan explained that these official goals will be used to “determine the level of tightened monetary policy in the short time.” He added, “Since the effectiveness of monetary policy needs some time to reflect on the economy, the short estimates of the term may differ from the interim goals.”