Cb: Cautious Stance İn Monetary Policy Should Be Continued

Current conditions of the markets and the economy necessitated maintaining the cautious stance in monetary policy, said Erdem Başçı, Governor of the Central Bank of the Republic of Turkey, on Monday.

The ongoing cautious monetary policy along with prudent fiscal and macroprudential policies were having a favorable impact on inflation, especially inflation excluding energy and food, Başçı said, in his presentation at the meeting held by the Banks Association of Turkey. "Uncertainty in global markets and elevated food prices necessitate maintaining the cautious stance in monetary policy."

Monetary Policy Committee (MPC) of the Central Bank of the Republic of Turkey, will hold its meeting on interest rates on April 22, where analysts do not expect any change on the policy rate, currently at 7.5 percent, remained unchanged in March meeting.

Measures to be proposed by the Food Committee would make an additional contribution to disinflation in food prices, he said.

The developments in the terms of trade and the moderate course of consumer loans contributede to the improvement in the current account balance, he added. "Although external demand remains weak, domestic demand contribute moderately to growth."

The continuation of maturity extension in the external borrowing of the Turkish banks would be beneficial for stable growth, Başçı added. - Istanbul