Turkey's Central Bank announced that it will be watching closely unhealthy prices in the market, saying it will take the necessary steps to limit the repercussions of these developments on inflation.
The announcement of Turkey’s Central Bank came as an attempt to reduce the tension arising from the collapse of the Turkish lira and against the backdrop of a meeting between Turkish President Recep Tayyip Erdogan and Central Bank governor Murat Cetinkaya on Wednesday.
They discussed economic developments in the country and the continuous relapse of the Turkish Lira against the American dollar, to a record and unprecedented rate, as well as rising inflation that reached 11 percent in April.
Erdogan is putting pressure on the central bank to reduce the interest rate. The Turkish lira dropped to its lowest levels in 8 years on Wednesday, reaching TRY4.5 against one dollar before it dropped to TRY4.41 at the end of the transactions. Yet, it rose again to approximately TRY4.44.
Erdogan has said he intends to take greater control over monetary policy after presidential elections on June 24.
The bank said Wednesday that it “is closely monitoring the unhealthy price formations in the markets.”
“Necessary steps will be taken, also considering the impact of these developments on the inflation outlook,” it added in a statement.
