Central Bank Governor Fatih Karahan: This is a long-term process, we have made significant progress

Karahan answered questions regarding the agenda during a live broadcast he attended. Karahan stated, "The goal is single-digit inflation."

Here are the highlights from Fatih Karahan's statements:

We decided to take our communication a step further this year. We visited various cities this year and tried to come together with our chambers of industry and tradespeople. We endeavored to explain to them what we want to do.

A tight monetary policy has been implemented for more than two years. However, annual inflation is still above 30 percent. Why are we still in a high-inflation environment, and how will inflation fall? What do you say about the situation in monetary policy over the past 2 years?

"As the Central Bank, we had three priority objectives. To reduce the FX-protected deposit (KKM) balance, and finally, to first establish disinflation and then bring inflation down to single-digit figures. In line with this goal, we established a tight monetary policy. Its effect was first seen in reserves. When we look at this process, we have recorded an increase of over 80 billion dollars in our gross reserves. When we look at the reserves on a net basis, there is actually a much better improvement. Therefore, these are important gains. The quality of the reserve increase is also important. A large portion of the increase was in Turkish Lira. Our citizens exchanged their foreign currency, and we accumulated it in our reserves.

We have also made great progress in our second priority, KKM. There was a balance exceeding 140 billion dollars. We are currently below 1 billion dollars.

Our third priority, which is more important than all of them, is price stability; this is the main goal. There are two reasons for this: one is that high inflation causes a loss of welfare for our citizens. The second is that the root cause of the first two problems is the deterioration of price stability.

This is a long-term process. We have made significant progress; the goal is first to descend to single-digit inflation and then to stabilize it at 5.

We limited inflation at 75 percent because, based on the outlook at that time, there was inflation that could have gone to triple-digit figures. From that day to this, we have reduced inflation to below 33 percent.

To summarize, demand conditions are consistent with disinflation. With the measures and steps we will take, we will recalibrate the tightness of monetary policy and do our best to ensure that inflation falls."

Until the third goal is reached, what do these mean for the citizens?

To give a short answer: stability. You can see that the expected volatility regarding the exchange rate has decreased significantly. In terms of macro-financial stability and confidence, these two gains are quite important.”