Ağbal: Priority of Price Stability Will Be Maintained

Ağbal: Priority of Price Stability Will Be Maintained CBRT President Naci Ağbal said “The priority of price stability will be preserved,” in his message after the interest rate decision. President of the Central Bank of the Republic of Turkey Naci Ağbal, spoke at the Parliamentary Planning and Budget Commission. Speaking about the price stability-oriented monetary policy, Ağbal said: “The positive relationship between price stability and stable and rapid growth stems from the improvement of business and investment environment by ensuring predictability in the economy. Price stability constitutes the most important measure of economic stability and long-term prosperity. Central banks make the greatest contribution to social welfare increase by providing price stability. CBRT will decisively implement the inflation targeting regime. Monetary policy decisions will be taken with the priority of price stability.” Referring to the issue of economic activity, Ağbal said, “Our economy maintains its strong momentum that emerged in the third quarter and the last quarter. The strong momentum in production, consumption and investment continues. Indicators for the last quarter points to a strong course in economic activity.” In addition, CBRT President Ağbal pointed out that the employment opportunity gradually increased with the recovery in the economy.   Made a Statement on Inflation Making a statement on the inflation outlook, Ağbal said: “The rise in inflation expectations continues, Inflation is relatively high especially in foreign currency-based groups. Upward risks to inflation require a tight and determined stance in monetary policy. The Central Bank is aware of its responsibility in reaching the medium-term inflation target of 5 percent and will show a determined attitude.” Repeating the messages regarding the foreign exchange market in the presentation of the Monetary and Exchange Rate Policy text, Ağbal said, "The floating exchange rate regime will continue, exchange rates will be formed according to the supply and demand balance under free market conditions. It will be aimed to strengthen foreign exchange reserves in terms of efficiency and financial stability, and the tools to this end will be used transparently, within a specific plan and under appropriate conditions.” CBRT President Naci Ağbal continued as follows: “The Central Bank will strengthen policy communication and data sharing in line with the principles of transparency, predictability and accountability. In terms of establishing and sustaining price stability, all stakeholders, especially monetary policy, require a decisive and determined struggle based on common wisdom. The GLP or interest rate corridor will not be traded as a primary policy tool.”