New banknote statement from CBRT Governor Karahan

Central Bank of the Republic of Türkiye (CBRT) Governor Fatih Karahan answered questions from members of parliament at the Turkish Grand National Assembly (TBMM) Planning and Budget Committee. Karahan announced that September inflation figures came in above expectations. Karahan also put an end to the discussions regarding new banknotes.

"THERE IS CURRENTLY NO WORK ON HIGHER DENOMINATIONS"

When asked about the composition of denominations in circulation, Karahan stated, "I had mentioned that we were evaluating the composition of denominations in circulation. We made a decision by also evaluating developments in non-cash payment instruments, and there is currently no work on denominations. We are continuing with the existing denominations, but we make evaluations from time to time."

"WE PROVIDE WHATEVER BANKS DEMAND WITHOUT INTERRUPTION"

Making assessments regarding whether new banknotes will be printed, Karahan included the following statements:

"First of all, as the Central Bank, we provide whatever banks demand without interruption within the framework of the emission process. Banks load denominations into ATMs in line with their own preferences and market needs."

EXPORTERS' FOREIGN CURRENCY CONVERSION REQUIREMENT

Regarding the question about the foreign currency conversion requirement for exporters, Karahan recalled that they have taken a normalization step and reduced the requirement, which was 40 percent, to 30 percent. Pointing out that they consider this obligation from time to time, Karahan stated that a 2 percent premium support is provided to firms for export revenue sales and that there are conditions for this.

"SUSTAINABLE GROWTH WILL BE ACHIEVED"

Regarding the question about the slowdown in the real sector, Karahan said, "We expect a slight slowdown in growth in 2024. This year, growth will be slightly below potential growth. Besides this, as stated in the Medium-Term Program (OVP), as inflation decreases and permanent price stability is achieved, sustainable growth will be achieved."

Regarding the question about firms filing for concordat, Karahan said, "Firms under financial stress can request a concordat to obtain payment relief while continuing their operations. We see that all data is well below historical averages."

"OUR JOB WILL NOT BE FINISHED UNTIL IT REACHES 5 PERCENT"

Emphasizing that the disinflation process began in June and that they will do their best to reduce inflation in line with intermediate targets from now on, Karahan expressed that headline inflation will continue to fall. Explaining that they review inflation dynamics from time to time, Karahan stated, "Our job will not be finished until inflation reaches 5 percent. After that, the duty of Central Banks is already to ensure the continuation of price stability."