Risks to loan growth highlighted at last PPK meeting in Agbal period By Investing.com

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Investing.com – raises the policy rate by 200bp to 19%. Following the PPK meeting, Şahap Kavcıoğlu was appointed to his place. The first PPK meeting chaired by Kavcıoğlu will be held on April 15th. Today, the summary of the last PPK meeting during the Ağbal period was published.

Highlights in the PPK summary:

Drawing attention to the increasing bond yields in the USA “Entries into the portfolio markets of developing countries have continued, albeit at a slower rate, since the previous MPC period. In this period, while there were outflows from debt markets across developing countries, entries to stock markets continued increasingly. If the rise in long-term bond yields in developed countries continues, portfolio flows to developing countries may be adversely affected. “ His statement was included.

Global inflation risk “Rising global inflation expectations and long-term bond interest rates in parallel with the improvement in growth expectations in developed countries cause uncertainties regarding the monetary policies of developed countries and volatility in global financial markets.” iAttention was drawn to the fad.

Increase in costs “Crude oil and industrial metal prices continue to rise. The scale mobile application limits the negative effects of crude oil prices. Although agricultural commodity prices are somewhat more moderate, the upward trend in certain products, especially oils, is preserved. The high level of producer inflation and the continuing problems in supply chains are additional pressure factors. Despite the partial appreciation in the Turkish lira in February, high-rate increases in producer prices continued in the input-providing sectors such as petroleum, chemical products, food, wood and cork, non-metallic mineral products and paper. The Board, especially from late January reputationin The upside risks on the year-end forecast target shared in the January Inflation Report have increased significantly due to the increase in credit momentum and the rise in import costs.” iIt was included in the statement.

That the rise in loan growth delayed the gradual improvement “Domestic demand conditions, cumulative cost effects, particularly the exchange rate, the rise in international food and other commodity prices, and high levels of inflation expectations continue to adversely affect pricing behavior and inflation outlook. On the other hand, wage and administered price adjustments due to supply constraints in some sectors maintain their importance on the medium-term inflation outlook. Although the expectation that the slowing effects of the monetary tightening on loans and domestic demand will become more evident, the recent upward trend in credit growth and the increase in import costs delay the gradual improvement in demand and cost factors. “ aWith the emergence of emphasis was made.

Board “Demand and cost-side effects on inflation remain important in line with the credit market and economic activity, as well as exchange rate volatility and developments in import prices. The outlook for domestic demand, international prices and global risk appetite keep the risks arising from external financing needs for the balance of payments alive. In line with the price stability target in monetary policy, the Committee will continue to adopt an approach that takes into account the risks to financial stability.

Considering the 2021 year-end forecast target, the tight monetary policy stance will be resolutely maintained for a long time until strong indicators are formed that point to a permanent decline in inflation and price stability. Within the scope of strong indicators that point to a permanent decline in inflation and price stability, the underlying trend of inflation and indicators of pricing behavior, diffusion indices, demand and cost factors and inflation expectations will continue to be closely monitored with the targets within the forecast horizon. The interaction of the risks on the inflation outlook created by the recent acceleration in loans, the increasing volatility in financial markets due to rising global inflation expectations and the increases in international commodity prices with the pricing behavior and inflation expectations will be closely monitored. If necessary, additional monetary tightening will be made. “ stated that the firm stance will be maintained with his statement.

After Kavcıoğlu’s election as president, critics also increased on the grounds that only interest was used in tight monetary policy during the Ağbal period, these criticisms raised questions about how to follow the policy in the new president period, but Kavcıoğlu gave the message that tight monetary policy will be maintained. The eyes will be at its meeting in April, and this meeting will show how the center will follow through in the process.

Author: Necdet Erginsoy

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