“Tight monetary policy will not cause a loss or weakness in production” By Investing.com

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Investing.com – The CBRT announced its first inflation report of the year today and the board did not change its inflation target for 2021, which it had forecast at 9.4%. Stating that the tight monetary policy will continue to be implemented throughout the year, President Ağbal underlined that the participation of the actors in the economy in the process is very important in ensuring price stability.

Emphasizing that trust is an indispensable phenomenon in the economy in his answers to questions from economists, Ağbal said that all tools will be used to build trust. He said that the tight monetary policy targeted at 5% in this direction would not cause any loss or weakness in economy-production. He stated that decreases in inflation and ensuring permanence with a tight monetary policy will increase investments and support the economy.

Ağbal stated that the current policy goal is to bring inflation to a permanent low level and the important thing is the medium-long term outlook.When price stability in the medium-long term is achieved, both direct capital and domestic capital will increase. “ said.

The points emphasized by the center in its inflation presentation:

– The inflation targeting regime will be resolutely maintained with all its elements in a simple operational framework.

– The Monetary Policy Committee will use all its tools in a timely and effective manner.

– The tight and cautious stance in monetary policy will be resolutely maintained for a long time until 2023, when the 5 percent target will be reached.

– In addition to the existing data, if any new data to be obtained indicate the risk of deviating from the medium-term target path in inflation expectations and pricing behavior, additional tightening will be made from the front.

– The level between the realized / expected inflation rate path and the monetary policy interest rate path up to the 5 percent target will be established by considering a strong disinflationary balance and this balance will be maintained continuously.

Author: Necdet Erginsoy

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