The Central Bank of Turkey will maintain a floating exchange rate for the national currency, as well as a medium-term inflation target of 5%. The regulator Wednesday announced its monetary and exchange rate policy for 2022, Report informs citing Turkish media outlets.
"The main goal of the Central Bank of the Republic of Turkey is to achieve and maintain price stability. The medium-term inflation target of 5%, set jointly with the government, has been maintained. Monetary policy will be formulated in such a way as to gradually bring inflation to the target level," the regulator's message reads.
The regulator will continue to apply the inflation targeting regime next year. The main policy instrument will be the weekly repo rate. The Turkish Central Bank also intends to continue building up its reserves as long as market conditions are relevant.
Recently, the country's financial system has been going through hard times due to the fall in the national currency rate. The national currency has depreciated sharply after several consecutive cuts in the Central Bank's discount rate: on December 20, the dollar reached a record 18.4 lira, while back in January it was worth 7.4 lira. However, after the statements of Turkish President Recep Tayyip Erdogan on new measures to counter the volatility of the exchange rate, the Turkish lira grew, practically winning back the losses of recent weeks: on Wednesday morning, the dollar was trading at about 12 lira.