Türkiye’s Central Bank will not allow demand-side pressures to undermine its ongoing efforts to curb inflation, Governor Fatih Karahan declared during a presentation in Washington on Wednesday.

Speaking at an international economic forum, Karahan reaffirmed the bank’s commitment to a stringent monetary policy until price stability is fully achieved.

In a statement released by the Central Bank on Thursday, Karahan emphasized that the tight policy stance is designed to support disinflation through multiple channels, including moderating demand, stabilizing exchange rates, and anchoring market expectations. “Our resolute approach ensures that inflationary pressures from demand conditions will not derail the progress we’ve made,” he said, underscoring the bank’s focus on long-term price stability.

Recent data from the Turkish Statistical Institute shows that Türkiye’s annual inflation rate has been gradually declining, dropping to 49.4% in September 2025 from a peak of over 85% in late 2022, reflecting the impact of the Central Bank’s aggressive rate hikes and policy measures. However, challenges such as volatile energy prices and global economic uncertainties continue to pose risks to the disinflation process. The bank has maintained its key interest rate at 50% since March 2025, signaling its determination to keep policy tight despite pressures for economic stimulus.

Analysts note that the Central Bank’s focus on demand management comes as consumer spending remains robust, potentially fueling inflationary pressures. Karahan’s remarks also addressed concerns about the Turkish lira, which has faced depreciation risks amid regional geopolitical tensions. The bank has implemented measures to stabilize the currency, including interventions in foreign exchange markets and coordination with fiscal authorities to align economic policies.

On Thursday, the Central Bank announced additional steps to strengthen its disinflation strategy, including enhanced monitoring of domestic demand indicators and closer coordination with international financial institutions to bolster Türkiye’s economic resilience. Economists expect the bank to maintain its hawkish stance through at least mid-2026, with potential rate cuts contingent on sustained declines in inflation and improved global conditions. (ILKHA)