In the past, the presentation of the inflation report used to be a meeting of interest mostly for bankers and the economic media. In the last 3-4 years, we have seen that this meeting has started to be followed by wider segments of the society. The presentation held a few days ago was one of them. It was the first organization where the new President Fatih Karahan would appear before the public in this capacity. However, there are five other features that distinguish this meeting from the previous ones.
1- First and most importantly, not only the Governor but also his deputies answered the questions. The fact that both Hatice Karahan and Cevdet Akçay took the floor in their respective fields was a very correct choice in terms of institutionalization of the CBRT and corporate communication, as it shows that monetary policy is conducted by a team. I hope that this practice will not be limited to this period, but will become a permanent style.
2- The second prominent aspect of the meeting was the emphasis that it is too early to talk about interest rate cuts. A large part of the society has the perception that “monetary policy consists of raising and lowering interest rates”. I think the Central Bank should make plans to destroy this perception in the long run. But let’s get back to our topic. There is nothing more “strange” than the fact that the public started talking about interest rate cuts less than a month after the last rate hike. Governor Karahan expressed this in kind words.
3- In the last part of the meeting, Vice President Akçay made a striking speech and used more angular and clear statements. He put forward the issues that most of the people knew about but voiced more quietly, one by one and in a very explanatory way.
4- Maintaining the end-2024 inflation forecast at 36 percent was another prominent topic. The Bank management made it clear why they insisted on the 36% target and that they would continue to take steps to achieve the current target instead of revising it upwards. At this point, I would like to make a brief reminder. The 2022 inflation forecast was revised eight times in previous inflation report presentations, starting at 5 percent and reaching 65.2 percent. So revising is the easy part. If the forecast had been revised upwards from 36 to 39 percent at the last meeting, I think there would be no one who would not find this “normal”. But we took a stance that said, “We are committed to our target and we will work to achieve it.” This is a challenge and I hope it succeeds.
5- It is a preference to answer questions collectively. However, from a communication perspective, I think this preference should be changed. It would be useful to show a more professional, more confident and more decisive stance.