Karahan: We are observing the developments in the fund market

Central Bank of the Republic of Turkey (CBRT) Governor Fatih Karahan stated that they are observing the developments in the fund market and pointed out that the demand for private sector bonds has weakened due to the developments in this field.

Karahan explained that the slowdown in domestic demand due to the tight monetary policy implemented accelerated the disinflation process. Karahan stated that the main trend of inflation has decreased recently and emphasized that the tight stance also limited the deterioration in inflation expectations.

In his evaluations, Fatih Karahan drew attention to the positive effects of tight monetary policy on macroeconomic balances. Emphasizing that price stability and financial stability are two fundamental elements that complement each other, Karahan stated that the price stability to be established will facilitate long-term planning and improve the investment and production environment.

Giving information about the latest indicators, Karahan stated that the main trend in inflation decreased and the price increases in basic goods, which gained strength in April, slowed down. Stating that the balancing in domestic demand with the support of tight monetary policy accelerated disinflation, Karahan warned that volatility in food prices may continue.

Stating that energy prices remain high due to the continuation of geopolitical risks, Karahan stated that the Ecel mobile system implemented since the beginning of the war has balanced fuel prices.

Addressing the foreign trade and current account balance outlook, Karahan said that exports maintained their strength despite the weakening in foreign demand. Karahan noted that the foreign trade deficit followed a more moderate course when gold and energy were excluded, and added that the decline in the total number of visitors did not have a negative impact on tourism revenues.