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Türkiye's Central Bank Vows Inflation Fight Amid Geopolitical Storm
(MENAFN) Türkiye's central bank will not waver in its battle against inflation regardless of the economic disruptions triggered by ongoing conflicts, Governor Fatih Karahan declared Thursday.
Addressing attendees at Anadolu's Participation Finance Summit at the Istanbul Financial Center, Karahan warned that geopolitical turbulence and mounting global uncertainties were increasingly shaping economic conditions worldwide.
Rising energy costs are casting a long shadow over inflation forecasts globally — and Türkiye is feeling that pressure directly, the governor said, citing measurable impacts on both the country's inflation trajectory and external balance outlook.
April's inflation figures already reflected the war's fingerprints, Karahan noted, with energy-driven effects expected to persist in the near term.
"The reflections of these effects on the medium-term inflation outlook will take shape with our monetary policy stance, and we will carefully evaluate these factors while making monetary policy decisions in the upcoming period," Karahan noted.
Reaffirming the bank's core mandate, Karahan drew a firm line in the sand on price stability.
"We will not allow the deterioration observed in inflation to spoil the medium-term outlook," the governor declared.
Annual inflation reached 32.4% in April, Karahan disclosed — elevated despite substantial progress since the May 2024 peak. Crude oil and natural gas prices remain above pre-war levels, while industrial metals and agricultural commodities have also seen notable price increases. Oil price volatility, though slightly eased, still exceeds its historical average.
The disinflation trend in core goods and services slowed through the first four months of the year, he acknowledged.
Participation Finance: A Pillar of Stability
Pivoting to structural economic concerns, Karahan flagged chronic underinvestment in domestic savings as a persistent vulnerability fuelling current account deficits.
"We care about the development and strengthening of participation finance," he emphasized, identifying the sector as essential to deepening financial inclusion and expanding the national savings base — both critical ingredients for macroeconomic stability.
The participation finance sector's share of Turkey's banking industry has more than doubled over 15 years, climbing from 4.6% to 9.5%, Karahan revealed. Since 2010, the Central Bank of the Republic of Türkiye has steadily updated regulations, instruments, and operational frameworks to ensure participation finance institutions access central bank liquidity on equal footing with conventional banks — including full participation in open market operations.
Addressing attendees at Anadolu's Participation Finance Summit at the Istanbul Financial Center, Karahan warned that geopolitical turbulence and mounting global uncertainties were increasingly shaping economic conditions worldwide.
Rising energy costs are casting a long shadow over inflation forecasts globally — and Türkiye is feeling that pressure directly, the governor said, citing measurable impacts on both the country's inflation trajectory and external balance outlook.
April's inflation figures already reflected the war's fingerprints, Karahan noted, with energy-driven effects expected to persist in the near term.
"The reflections of these effects on the medium-term inflation outlook will take shape with our monetary policy stance, and we will carefully evaluate these factors while making monetary policy decisions in the upcoming period," Karahan noted.
Reaffirming the bank's core mandate, Karahan drew a firm line in the sand on price stability.
"We will not allow the deterioration observed in inflation to spoil the medium-term outlook," the governor declared.
Annual inflation reached 32.4% in April, Karahan disclosed — elevated despite substantial progress since the May 2024 peak. Crude oil and natural gas prices remain above pre-war levels, while industrial metals and agricultural commodities have also seen notable price increases. Oil price volatility, though slightly eased, still exceeds its historical average.
The disinflation trend in core goods and services slowed through the first four months of the year, he acknowledged.
Participation Finance: A Pillar of Stability
Pivoting to structural economic concerns, Karahan flagged chronic underinvestment in domestic savings as a persistent vulnerability fuelling current account deficits.
"We care about the development and strengthening of participation finance," he emphasized, identifying the sector as essential to deepening financial inclusion and expanding the national savings base — both critical ingredients for macroeconomic stability.
The participation finance sector's share of Turkey's banking industry has more than doubled over 15 years, climbing from 4.6% to 9.5%, Karahan revealed. Since 2010, the Central Bank of the Republic of Türkiye has steadily updated regulations, instruments, and operational frameworks to ensure participation finance institutions access central bank liquidity on equal footing with conventional banks — including full participation in open market operations.
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