The Central Bank (CB) continues to work on the revision of its monetary policy in the light of the ‘Turkey Economy Model’, according to the CB Governor Sahap Kavcioglu. Speaking at the first Inflation Report meeting of the year, the CB Governor said the Liraization Strategy which prioritizes the usage of TRY will be one of the key elements of the new policy.
Kavcioglu presented the main framework of the Turkey Economy Model’s Central Bank leg with his statement about the framework policy. Accordingly, the bank will primarily prevent the dominance of USD in money markets with the policy change called Liraization. To do so, financial products, guarantee diversification, and liquidity management policies will be formed. FX-protected TRY deposit accounts and similar new instruments, the bank’s provision policies, swap agreements, and rediscount credits will be used in this respect.
The CB Governor stated that they revised the year-end inflation forecast for 2022 by 11.4 points and that the prediction interval increased in an environment where inflation is high. Here are year-end annual inflation forecasts according to the Central Bank’s 2022-1 Inflation Report:
- 2022: 23.2% (Prediction interval: 18.6%-27.8%)
- 2023: 8.2% (Prediction interval: 3.4%-13.0%)
- Medium-term: 5%
Regarding the instruments, Vice President Fuat Oktay said the daily average inflow in the FX-protected TRY deposit account system has nearly amounted to TRY 7bn since the beginning of the year and the total size of the FX-protected TRY deposit accounts have reached TRY 209bn.
Economic Confidence Index increased by 2.7% to 100.8 points in January, compared to the previous month, according to the Turkish Statistical Institute (TurkStat).
Services producer price index (S-PPI) rose by 54.89% in December 2021, compared to the same month of the previous year, according to TurkStat. The S-PPI surged by 12.81% on a monthly basis.
>> Residents’ FX deposit accounts fell by USD 1.9bn from USD 234.21bn to USD 232.27bn in the week ending on January 21, compared to the previous week, according to the Central Bank.
The Central Bank’s net reserves increased by USD 1.72bn from USD 7.54bn to USD 9.26bn in the week ending on January 21, compared to the previous week. The bank’s total reserves rose from USD 109.54bn to USD 109.81bn in the same period.
>> The confirmed number of daily COVID-19 cases has exceeded 82,000 in the country. Some 82,180 new coronavirus cases and 174 deaths due to the COVID-19 were reported in the last 24 hours by the Health Ministry.
>> Ahmet Bolat has been appointed new chairman of Turkish Airlines’ board and executive committee, according to a statement from the national flag carrier. The decision came during a board meeting of the company after Mehmet Ilker Ayci reigned from the post.
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