Central Bank Governor Fatih Karahan has stated that the underlying trend of inflation has eased in recent months, emphasizing that the improvement in household and corporate expectations has played a key role in the decline.
Speaking at meetings with international investment banks and financial institutions in London and New York, where he delivered a presentation titled “Monetary Policy and Inflation Outlook in Türkiye,” Karahan shared his assessments on inflation dynamics and monetary policy.
Recalling that inflation ended 2025 at 30.9 percent, Karahan noted, “The decline in inflation was broad based.”
He cautioned that food inflation could rise again in the early months of the year, adding, “Inflation over the next two months might be noisy, but lower inertia in services will support disinflation over 2026.”
Karahan underlined the importance of maintaining a restrictive stance, stating, “The tight monetary policy stance, which will be maintained until price stability is achieved, will strengthen the disinflation process through demand, exchange rate and expectation channels.”
He further explained that the Central Bank’s Monetary Policy Committee (MPC) will set the policy rate by considering realized and expected inflation along with its underlying trend, ensuring the degree of tightness required by the projected disinflation path in line with interim targets.
Reiterating the bank’s commitment, Karahan stressed, “Monetary policy stance will be tightened in case of a significant deviation in inflation outlook from the interim targets.”
The MPC is scheduled to convene on Jan. 22 to determine the key policy rate. At its previous meeting on Dec. 11, the MPC cut the one-week repo auction rate from 39.5 percent to 38 percent.
