Bloomberg passes the statements made by CBRT head Prof Kavcıoğlu in his meeting with investors. The first titles are the previous ones. In addition to strong export data for March, these announcements also added value to the TL.
In his speech, Kavcıoğlu stated that the tight monetary policy will continue, taking into account both current and expected inflation levels. He stressed that it will be essential to maintain the bank’s corporate stance and that decisions on interest rates will be made in light of data provided by the CBRT technical team. He added that restrictive monetary policy will not be abandoned without a permanent decrease in inflation. Although he emphasized the fulfillment of the medium-term inflation target of 5%, the new president said that international developments will also be taken into account.
In the presentation of the Bank’s technical team, it was noted that domestic demand remained strong as of the first quarter of 2021 and that the strengthening to feed inflation accelerated at the end of February. It was said that with the easing of the pandemic prohibitions in March, the upward movement of domestic demand strengthened and that domestic demand was advancing strongly above the trend compatible with the long-term inflation target.
The source of domestic demand was emphasized on the basis of the increase in imports in the last two months.
The presentation also included the expectation that gold imports will return to historical averages and the current account deficit will contract with the increase in exports.
In the question and answer session, the technical team said they expect the TL’s depreciation to gradually weaken after its reflection on inflation in April. At the meeting it was agreed that the CBRT inflation report to be announced at the end of April could lead to an upward revision of the year-end expectation of 9.4% due to the increase in world commodity prices.
In response to one of the questions, Kavcıoğlu stated that, as Head of the CBRT, relevant measures will be taken according to the suggestions of TCM staff in terms of institutional continuity, not the opinions of the old articles by Yeni Şafak. “Don’t look before my request,” he said. “If necessary, will you increase interest rates?” Although he did not give a clear answer to her question, he left the door open.