CBRT Governor Erkan's statement on inflation and rents: It's left for another spring!

Central Bank Governor Hafize Gaye Erkan spoke at the Istanbul Chamber of Industry (ISO) Joint Meeting of Professional Committees to evaluate sectoral issues.

Stating that the greatest risk to sustainable and high-quality growth is volatility in asset prices, Erkan said, "It is extremely important that disinflation is the priority. The first condition of the fight against inflation is a common perception and awareness."

Erkan emphasized that it is important for the predictable inflation path to be accepted and respected by the general public and price setters.

IMPROVEMENT IN INFLATION HAS BEGUN

Erkan used the following expressions in her speech:

"Low inflation corresponds to a much broader stability than price stability alone, and there is no longer any luxury to compromise on this stability. To the extent that the inflation path is not accepted as an indicator, the cost of disinflation will increase. There will be no compromise on the goal of inflation occurring near the path. Signs of improvement in inflation expectations have begun to emerge. There are also some positive developments in pricing behaviors. Price reductions have begun to be seen in product groups such as automobiles, white goods, and furniture after a long time."

POINTED TO 2025 FOR RENTS

Erkan stated that they have received clear signals of a slowdown in rental housing listing price increases in major cities, and that disinflation in rent and education will become more noticeable by the end of 2024 and in 2025.

Erkan used the expression, "A decline has also begun in the main trend of inflation. Leading indicators for November also point to the continuation of the decline in monthly inflation. The pressure on gold, foreign exchange, and real estate prices will slow down."

TRANSITION TO TL

Making evaluations regarding the transition to TL, Erkan used the following expressions:

"We aim for 75 percent of rediscount credits to be provided to firms without creating additional collateral costs. Significant progress has been made on this issue. With the strengthened YTAK, we aim to increase production capacity in areas that will contribute to the current account balance and whose indirect effects will be felt in exchange rate and price stability."

Stating that they believe the time for the transition to TL has come, Erkan said, "We see the most direct reflections of this in deposit developments."