Central Bank head vows data-focused approach
This approach will take into account all macroeconomic indicators, primarily inflation and economic activity, Uysal told Anadolu Agency in an interview.
“We will continue to closely monitor micro dynamics and field data. In order to enhance the effectiveness of the monetary policy, we will work in tandem with all parties that will provide input to the processes, primarily the financial sector, corporate sector and public sector,” he said.
Uysal noted that the bank’s Monetary Policy Committee (MPC) will analyze all data releases and give the most appropriate decision guided by commonsense and consultation.
The MPC is scheduled to meet on July 25 to decide its key rates.
Uysal stressed that communication policies are essential in terms of the effectiveness of the policies implemented by the Central Bank in pursuit of price stability and in terms of accountability.
“I believe that establishing effective, transparent and inclusive communication with the public concerning our Bank’s activities on various platforms will provide major contributions to achieving our targets,” he said.
Uysal noted that the Central Bank will be sharing more concrete information on a more frequent basis through various media regarding the bank’s approach to monetary policy and general issues.
He added that the Bank may take some steps towards increasing its reserves in the upcoming period depending on the global conjuncture and trend of capital flows.
The new bank chief stressed that financial stability cannot be achieved unless price stability is established and said: “In the upcoming period, we will be using all available instruments, particularly reserve requirements, to contribute to financial stability.”
Uysal predicted that a disinflation process will remain in place on account of reduced cost pressures and weakened domestic demand conditions in 2019.
He pointed out that inflation expectations are on the decline and both inflation dynamics and pricing behavior have started to improve.
“All these developments suggest that there is room for maneuver in monetary policy.”
According to Uysal, recent data point to a moderate economic recovery driven by private and public expenditure as well as net exports. He noted that despite the subdued global economic growth, both trade of goods and tourism and transport remain on the rise.
“These developments have led to a rapid improvement in the current account balance. We expect the current account balance to approach zero by the end of the year.”