Turkey’s Central Bank Governor Fatih Karahan has said that the bank will maintain its tight monetary policy stance until price stability is achieved, arguing that the approach will reinforce the country’s disinflation process through demand, exchange rate and expectations channels.
Karahan delivered his remarks during a presentation on “Monetary Policy and the Macroeconomic Outlook” at the Turkish Exporters Assembly headquarters in Istanbul.
He said the bank has conducted face‑to‑face meetings with firms across sectors since 2013, adding that 2,505 companies were interviewed in 2025 and 14,705 over the past five years. Information gathered from these meetings, he said, feeds into policy decisions and helps identify both cyclical developments and structural challenges.
Karahan highlighted rising reserves and noted that balances in the government‑backed FX‑protected lira deposit scheme have nearly reached zero. Short‑term indicators and the medium‑term outlook, he said, show that disinflation is underway and will continue.
He stressed that the bank will keep monetary conditions tight to anchor expectations on a lasting basis. While economic growth continues, he said, sectoral transformation is also becoming visible, and lasting price stability will support broad‑based gains in welfare.
Karahan said inflation has been easing across categories since May 2024, though housing and education costs continue to push services inflation higher. He expects rent inflation to keep declining and said recent regulations on private school fees will support disinflation in education.
Cost pressures have eased, he added, and both consumer and business inflation expectations are trending downward.
On trade, Karahan said exports are rising while imports have fallen, with external demand remaining the key driver. A recovery in European Union demand has supported Turkish exports, he said, even as global trade remains weak. Costs in euro terms have declined, helping Turkey increase its market share in Europe while maintaining its share in global exports.
Karahan said productivity has improved and that price stability will strengthen the investment and production environment. The Monetary Policy Committee will set interest‑rate decisions in line with interim inflation targets, he said, using a cautious, meeting‑by‑meeting approach. If inflation deviates significantly from those targets, he added, the bank will tighten policy further.