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Turkey Strives for Disinflation
Turkey’s central bank governor, Hafize Gaye Erkan, reassured international investors on Thursday that the country’s dedication to achieving disinflation remains unwavering. Erkan, appearing hopeful, suggested that a conclusion to the monetary policy tightening cycle may occur in the near future, according to two insiders who informed Reuters.
In the middle of meeting foreign investors in New York, Erkan conveyed that succeeding in disinflation is a metric of success. The attendees of her statement confirmed her determination and commitment.
Increasing Foreign Exchange Reserves
Erkan, furthermore, indicated to her audience that Turkey would judiciously persist in augmenting its foreign exchange reserves. This process, she vouched, would be boosted by the surge of capital inflows, sources reported.
Statistics revealed on the same day by the Institute of International Finance exhibited that foreign investors injected roughly $5.4 billion into Turkish debt and equity portfolios during the last couple of months of the preceding year. This represented a significant inflow, the largest of its kind in half a decade.
The previous week, Reuters disclosed that U.S financial powerhouses, Pimco and Vanguard, had re-entered the Turkish marketplace, thanks to the country’s reinstated economic orthodoxy.
New Central Bank Chief Increases Rates
In mid-2021, President Tayyip Erdogan announced a reshuffled cabinet and introduced Gaye Erkan as the new head of the nation's central bank. Since taking office, Erkan has aggressively driven up rates by a substantial 3,400 basis points, reaching 42.5% to stymie a raging inflation that hovered around 65% on an annualised basis last month.
The Turkish central bank did not immediately offer a comment in response to a Reuters inquiry.
