What matters on Friday, December 3

Nureddin Nebati, who took over as the treasury and finance minister from Lutfi Elvan, made a statement about the priorities of Turkey’s economy management yesterday. The new Treasury and Finance Minister said Turkey’s high interest rates are not a top priority issue and that full economic independence is his primary goal. “Hopefully we will experience a period in which all institutions and organizations…will work in strong, reliable, determined, resolute and full coordination, steps will be taken within the frame of the policies determined by our President, and all kinds of devotion will be showed to implement these steps,” Nebati said. “Our top priority will not be high interest rates. We want to boost investments, production, and exports in order to eliminate chronic problems such as current account deficit and foreign debt, while increasing employment and wages,” he noted.

The opposition reacted to the appointment, pointing out that three treasury and finance ministers were replaced in a year.

In the meantime, Central Bank (CB) Governor Sahap Kavcioglu held the last investor meeting of 2021. According to sources who attended the meeting, Kavcioglu brought up the limited room for a further policy rate cut and said that the CB would use it this month. Cumulative effects of the monetary policy would be seen in the first half of 2022, he added. Kavcioglu didn’t clearly indicate whether there would be further rate cuts in 2022, but President Recep Tayyip Erdogan’s statements give send the clear message that interest rate cuts will continue until the 2023 elections.

The current price surge is temporary and will not transform into permanent inflation, according to the CB Governor. Inflation will calm to lower levels at the end of 2022, the medium-term 5% inflation goal will be achieved, and the CB isn’t considering revising this target, according to attendees. However, inflation won’t decline to a single-digit figure if there is no permanent fall in foreign exchange rates, and the upper and lower limits are important in terms of inflation decrease. They also stated that a 30% to 40% drop would be observed in inflation.

Annual inflation rose to 21.31% in November, hitting a 3-year high, according to the Turkish Statistical Institute (TurkStat). USD/TRY hovers around 13.78 following the announcement of the inflation number.


Annual inflation reached 21.31% in November, according to TurkStat. The Consumer Price Index (CPI) increased by 3.51% in the same period.

The Domestic Producer Price Index (D-PPI) jumped to 54.62% in November compared to November of last year, according to TurkStat. The D-PPI climbed by 9.99% on a monthly basis.

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