ISTANBUL (Reuters) -Turkey’s central bank will adjust policy to hit its targets despite a recent slowdown in the disinflation process, Governor Fatih Karahan said on Wednesday.
In an interview broadcast by the bank with journalists and an economist, Karahan likened inflation to a virus, but said the correct policy steps are being taken.
“There has been a recent slowdown in disinflation, but even so, we will do our best to reduce inflation in line with our targets by re-calibrating the monetary policy tightness and taking the necessary measures,” he said.
“Demand conditions are currently consistent with disinflation,” he added.
Inflation eased a bit more than expected in October to 32.87% annually and to 2.55% monthly, after having remained more elevated than expected in the previous two months.
The central bank responded to the price pressure by slowing its easing cycle with a 100-point interest-rate cut last month to 39.5%.
Disinflation is a “long term process” but preliminary data suggests it continues in a healthy way in November, Karahan said.
“Inflation is essentially like a virus. When it stays in the body for a long time, it becomes difficult to eliminate,” he said.
“But we are applying the right prescription. We have achieved positive results so far. We have no doubt about our ultimate goal. The timing of the prescription’s effect varies from person to person.”
The central bank targets 16% annual inflation for the end of next year, with a forecast range of 13% to 19%.
(Reporting by Nevzat Devranoglu and Ezgi Erkoyun; Editing by Jonathan Spicer and Bill Berkrot)
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