Turkey's central bank pledges continued tight policy as inflation eases

Central Bank Governor Fatih Karahan told the JP Morgan Turkey Economic Forum that headline inflation remains pressured by supply‑side shocks, but the inflation rate fell to 32.1% in June. He noted that price growth in rent and education is decreasing, supporting a gradual disinflation process, while core inflation showed a modest upward trend that still poses short‑term risks.

Karahan emphasised that demand for the Turkish lira stays strong, household foreign‑exchange demand is limited and the bank’s foreign‑exchange reserves remain robust. He said the central bank will keep its monetary‑policy stance tight until price stability is achieved and warned that any significant deviation from inflation targets could trigger further rate hikes.