Fatih Karahan delivered a lecture titled “Monetary Policy and Macroeconomic Outlook” at the Turkish Exporters Assembly (TİM) campus in Istanbul.
Stating that they have had face-to-face meetings with companies from different industries and sizes since 2013, Karahan said: “We met with 2,505 companies across Turkey in 2025 and a total of 14,705 companies in the last 5 years.”
Stating that they have used the qualified and timely information obtained in the decision-making processes and received information about structural problems as well as cyclical developments, Karahan explained that they have established two-way communication with representatives of the real industry and shared the submitted expectations and suggestions with relevant public institutions.
While drawing attention to the increase in reserves, Karahan emphasized that the balance of exchange-protected Turkish lira deposit and equity accounts (KKM) is approaching zero.
Noting that they attach importance to the progress they have made in ensuring price stability, Karahan said: “Both the short-term indicators and the medium-term outlook show that disinflation is ongoing and will continue.” he said.
Karahan explained that the restrictive monetary policy would be maintained in order to permanently anchor expectations.
Karahan explained that as economic growth continues, sectoral change can also be observed, stressing that price stability will ensure a sustained and comprehensive increase in welfare.
“The decline in rental price growth is expected to continue”
CBRT President Karahan stated that there has been an overall decline in inflation since May 2024, explaining that rent and educational items have increased service inflation.
However, “the decline in rent increases is expected to continue.” In his assessment, Karahan pointed out that regulating private school fees will also help reduce inflation in the education sector.
Karahan explained that indicators point to a slowdown in the main trend, emphasizing that cost increases have declined and consumer and business inflation expectations have also begun to decline.
“While our market share in Europe increased, we were able to maintain our market share in global exports.”
Stating that imports decreased while exports increased, Fatih Karahan explained that the development of foreign demand is the most important factor affecting exports.
Karahan explained that the recovery in European Union (EU) demand is having a positive impact on Turkey's exports, pointing out that global trade remains weak although it is gradually recovering.
Karahan explained that costs in euros have fallen: “While our market share in Europe increased, our market share in global exports remained.” he said.
Karahan explained that cost trends vary depending on sector-specific factors and explained that the sectoral composition of exports changes to some extent.
“The scope of the steps will be reviewed with a meeting-based and cautious approach focused on the inflation outlook.”
CBRT President Karahan emphasized that labor productivity has increased and noted that price stability has improved the investment and production environment.
In his assessment, Karahan said: “The tight monetary policy stance maintained until price stability is achieved will reinforce the disinflation process through demand, exchange rate and expectations channels.” he said.
Karahan explained that the Monetary Policy Committee (MPC) will determine the steps to be taken on the key interest rate to ensure the tightness necessary to combat inflation in line with the interim targets, taking into account inflation insights, the main trend and expectations. Karahan said: “The scope of the steps will be reviewed with a meeting-based and cautious approach focused on the inflation outlook.” he said.
Karahan explained that the monetary policy stance will be tightened if the inflation outlook deviates significantly from the interim targets.
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