Price stability needs structural policies: Turkish Central Bank head
BURSA - Anadolu AgencyTurkey needs a more comprehensive approach to price stability in the light of experience gained in the last 10 years, the country’s Central Bank governor said March 25.
Speaking at the closing session of the Uludağ Economy Summit in the northwestern province of Bursa, Murat Çetinkaya said the Central Bank is attaching higher importance to structural policies, while there is a global concern about sustainability.
Çetinkaya stated that many of the problems that had been encountered by developed countries have not been observed in Turkey during the post-global financial crisis period.
“For instance, the accessibility problems to financial tools due to the high levels of financial leverages were not experienced in our country. Also, Turkey does not have any efficiency problem related with aging population. But there are some fields that we can develop ourselves, like price stability,” he said.
Pointing out to the required comprehensive approach, Çetinkaya said it has three important components.
“First of all, we should diagnose the factors of the inflation other than monetary policies, and we should increase social awareness about this issue,” he said.
“Establishing a platform to share the ideas of all related institutions comes in the second place. As a third component, we have to follow a decisive monetary policy that should be built with a strong communication,” he added.
Efforts to maintain price stability
Çetinkaya stressed the importance of price stability, which has a multidimensional interaction with a lot of problems. “Deepening of the financial markets, a more efficient and balanced distribution of finance and dollarization issues are interacting with price stability in some way,” he said.
“These issues are also directly correlated with efficiency and sustainable economic growth. Therefore, our efforts for price stability are critical for economic development,” he added.
Çetinkaya also underlined the importance of other precautions to improve external balance permanently.
“Those actions can be listed as increasing the level of domestic savings, supporting efficiency in production process, ensuring flexibility in the labor markets and reducing the dependency on imported intermediate goods,” he said.
Turkish economy ‘performs very well’ despite shocks
He noted that, although there were many domestic and international shocks in recent years, the Turkish economy had performed quite well with its prudent monetary policy and solid financial structure.
“However, we should not lose our focus to take necessary steps to strengthen the foundations of the economy in a period in which the global uncertainties are very high,” he said.
“As the Central Bank, we are preserving our comprehensive approach and will continue to support this process. The Turkish economy is on the right track and with the right reforms, hopefully, the foundations of our economy will continue to be strong,” Çetinkaya added.