ISTANBUL (Reuters) – Turkey’s monetary policy will remain tight for a while to ensure that inflation falls and remains anchored at lower levels, Finance Minister Mehmet Simsek said on Thursday.
“Since inflation is high in our country, monetary policy will remain tight for a while. It will go up to a level that will anchor inflation and will stay there for a while,” Simsek told a conference in Ankara.
After years of easy policy, the central bank pivoted in June and has since raised its key interest rate by 3,400 basis points to 42.5% to rein in inflation that neared 65% last month.
The bank said it will complete its tightening cycle as soon as possible.
Simsek, who was appointed in June to help lead the policy U-turn, said he expects lower inflation and economic growth this year, and a global transition to looser monetary policy.
Inflation is high but in line with Turkey’s medium-term programme, and it will fall, he added.
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The ministry clarified that Simsek was referring to the global situation when discussing monetary policy.
(Reporting by Ezgi Erkoyun, Can Sezer and Birsen Altayli; Writing by Daren Butler; Editing by Jonathan Spicer)