Central Bank Governor Fatih Karahan answered questions from MPs on the Parliamentary Planning and Budget Commission and explained his speech made last week on the topic of “gold under the pillow”.
He responded to the allegations made in this regard on social media.
Karahan explained that he took part in a panel discussion in the Netherlands as a speaker: “In this speech, I highlighted the changing role of the dollar, the recent devaluation of the dollar and the resulting global demand for gold, as well as the resulting increase in gold prices. I emphasized that the decline in the dollar represents a positive supply shock for developing countries, that is means it strengthens growth and reduces inflation at the same time.”
Karahan explained that the devaluation of the dollar in developing countries usually means both stronger growth and falling inflation, adding:
“But I mentioned that the movement during this period may have different impacts on the Turkish economy. Because it is estimated that there is a significant gold stock under the cushion in our country. Our estimates as a result of various analyzes suggest that the gold stock under the cushion is in the range of 400-500 billion dollars. If we look at different organizations, domestic or foreign organizations use similar data and come in their analyzes carried out using different methods produce similar estimates. There are also those who claim it is higher, but in general it is 400-500 billion dollars. It is estimated to be round. Now, if there is such a serious stock of gold and taking into account the rise in prices over the last year, its wealth impact in our country exceeds 100 billion dollars. I didn't just say that. We had already researching this topic. “We shared this in a blog post on our website in May.”
Emphasizing that he shared the results of these studies last week, Karahan said: “I did not make any new announcement. In my speech, I did not in any way blame our citizens for inflation. On the contrary, he explained that price stability is one of the most important factors that will reduce the demand for gold under the pillow. Because the reason why there is such a high gold inventory in Turkey is the inflation experience from the past.” he said.
“We are the institution responsible for inflation, we will not shirk responsibility”
Central Bank Governor Fatih Karahan also answered questions about the decline in the inflation process.
“We are the responsible institution when it comes to inflation, no matter the reason,” Karahan said, adding: “Even if it is beyond our control, we are responsible. There was frost, there was a drought, the back-to-school effect… These are not excuses. We are not going to shirk responsibility just because it happened. We are just trying to identify deviations from inflation targets so that we can respond to those deviations with the right one.” Politics can react.” he said.
“We do not agree that inflation has not fallen”
Karahan pointed out that with the tightening of monetary policy, inflation fell significantly from 75 percent to 33 percent and continued:
“Therefore, we do not agree with the statement that 'inflation has never fallen'. However, although there has been a serious decline, we have accepted, both in the presentation and in our previous communications, that this decline is slower than expected. Its speed may vary depending on road conditions. For various reasons, we can sometimes speed up the disinflation process and sometimes slow it down. The important thing is to remain focused on this heading towards the target. With our measures we will ensure that inflation falls within the framework of our interim targets. Because we know that price stability is a prerequisite for sustainable growth and greater social prosperity.”
“We have no minimum wage requirements”
Fatih Karahan responded to the questions about the minimum wage by saying: “Unfortunately, things that I didn't say may come to my attention, such as the gold issue. We don't have guidelines on the minimum wage. We are not a decision-maker or an institution that gives advice. I don't have much to say about it here.” He replied:
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