Supportive fiscal and macroprudential policies have mitigated the downside risks on economic activity, the governor of Turkish Central Bank said Thursday.
Giving a presentation to investors at the International Monetary Fund and World Bank Meetings in Washington D.C, Murat Cetinkaya stressed that currency volatility slowed shortly after the tightening monetary policies, according to a statement on the bank’s website.
"Lagged impact of cost push factors will keep inflation at elevated levels in the near term," Cetinkaya said, adding that a tight stance in monetary policy would be maintained until inflation outlook displayed a significant improvement.
Cetinkaya also noted that inflation was expected to peak in April before gradually coming down in the forthcoming period.
According to the Turkish Statistical Institute (TurkStat), Turkey's annual inflation rate rose 11.29 percent year-on-year in March, from 10.13 percent in February.
The dollar/Turkish lira exchange rate, which saw a historic hike -- around 3.94 liras -- in mid-January, stood at 3.6450 at Thursday’s close.
The rate was 3.02 on average last year while $1 traded at 2.71 liras in 2015.
“Recent macroeconomic developments indicate the resilience of the Turkish economy,” he said. “Contribution of exports to economic growth will increase throughout 2017.”
According to TurkStat, Turkey's GDP, which grew 2.9 percent last year, was around 2.59 trillion Turkish liras ($856.8 billion) in 2016, compared with 2.34 trillion liras ($861.5 billion) the previous year.
By Muhammed Ali Gurtas