Turkish Central Bank: Inflation target of 5% in 2022

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The Central Bank issued the text of the monetary policy and exchange rates for the year 2022, and accordingly, the medium-term inflation target was set at 5%, the Central Bank announced its monetary policy and exchange rates for the year 2022.

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The medium-term inflation target was set at 5 percent, and the text stated that “monetary policy will be shaped in such a way that inflation will gradually bring inflation closer to this target,” and it also stated that the inflation targeting regime will continue.

According to the roadmap, the floating exchange rate regime will continue next year, the exchange rates are formed in free market conditions according to the balance of supply and demand, and the main policy instrument will remain the one-week repurchase rate.

The central bank will continue to increase its reserves next year, the reserve option mechanism will be completely terminated, the costs of foreign currency liabilities will be increased.

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Priority will also be given to mechanisms that will support the development of Turkish lira deposits. In addition, swap amounts will be reduced, and the Central Bank will give priority to the principles of transparency, predictability, and accountability.