ANKARA, Feb 7 (Reuters) – Turkey will maintain its tight monetary policy and keep fiscal discipline in order to further lower inflation, Vice President Cevdet Yilmaz said on Saturday.
Turkish consumer price inflation leapt to a higher-than-expected 4.84% month-on-month in January, official data showed on Tuesday, driven in part by new year price adjustments and a jump in food and non-alcoholic drinks prices. Annual inflation dipped to 30.65%.
Speaking at an event in the southeastern province of Siirt, Yilmaz said the 45-point fall in inflation since May 2024 was not enough, adding the government was on a path to further lower consumer prices.
“We will maintain our tight monetary policy, we will keep our disciplined fiscal policies, we are determined to do this. But these are not enough either. On the other hand, we have to contribute to our battle with inflation through our supply-side policies,” he added.
Last month, Turkey’s central bank lowered its key interest rate by a less-than-expected 100 basis points to 37%, citing firming inflation, pricing behaviour and expectations that threaten the disinflation process.
After a brief policy reversal early last year due to political turmoil, the bank’s rate-cutting cycle resumed in July with a 300-basis-point cut, followed by more subsequent cuts.
The bank has eased by 1,300 points since 2024, when it held rates at 50% for most of the year to wrestle down inflation expectations.
Last month, the head of the Turkish Exporters Assembly told reporters late that Turkey’s extended period of tight economic policies had hurt manufacturers, with high interest rates and costs posing risks to the country’s official $282 billion export target.
(Reporting by Tuvan Gumrukcu; Editing by Toby Chopra)
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