“In the framework of the duty assigned by law, the CBRT continues to contribute to balanced and sustainable growth in the Turkish economy with a view to achieving the price stability objective while at the same time safeguarding financial stability.”

2016 marked a year in which the Central Bank of the Republic of Turkey (CBRT) strengthened its focus on price stability and took significant steps in its communication policy. In the light of the past ten years’ experiences, the CBRT designed and promoted a holistic strategy to achieve lasting price stability. This strategy comprises a framework through which the CBRT has deployed monetary policy tools to a necessary and sufficient extent to fight inflation and developed a holistic approach geared towards mitigating trade-offs jointly with stakeholders by increasing the awareness of structural factors.

Accordingly, in 2016, the CBRT, while on the one hand moving in the direction of transition to a framework that allowed a clearer understanding of the monetary policy stance, on the other, it aimed to identify and raise public awareness of structural matters that impeded disinflation on a permanent basis. The CBRT took significant steps in order to contribute to solution proposals and to create a common discussion platform regarding structural matters. In this context, the Structural Economic Research Department was established. In that way, the required institutional capacity was set up to identify structural obstacles and to develop solution proposals in the disinflation process through close communication with the corporate sector.

In 2016, the CBRT intensified its on-going studies regarding food prices, which are one of the major obstacles to the achievement of price stability. In this period, the related institutions were decided to be represented at the highest level in the Food and Agricultural Product Markets Monitoring and Evaluation Committee and the committee secretariat duty was undertaken by the CBRT. This arrangement allowed concrete measures to be taken by developing a solution-oriented cooperation process among stakeholders. The positive effects of the steps taken are expected to become apparent over time.

In the period ahead, plans are in place to take the necessary steps to implement the joint institutional endeavor of the Food Committee by expanding its coverage in other structural fields linked to price stability.

Within the framework of the holistic approach strategy in 2016, the CBRT strengthened its efforts to closely monitor and understand the corporate sector. In this context, the scope of corporate sector meetings held with a view to following the recent economic developments and reinforcing the communication network with the real sector was expanded and necessary arrangements were made in the governance and organizational structure of the CBRT to manage the process more effectively.

A variety of arrangements were made over the past year in the field of communication to reinforce the effectiveness of all these endeavors and to raise public awareness. In this scope, meetings were organized with corporate sector representatives and financial institutions, technical meetings with investors and analysts started, and social media tools were utilized actively. Moreover, as a part of our communication policy, the “CBRT Blog” was launched in order to share and discuss the views of the CBRT staff with the public and make timely contributions to the economic agenda.

In the framework of the duty assigned by law, the CBRT continues to contribute to balanced and sustainable growth in the Turkish economy with a view to achieving the price stability objective while at the same time safeguarding financial stability. In accordance with the agreement reached with the Government during the preparation of the Medium-Term Program, the inflation target for the 2017-2019 period has been set at 5 percent. The CBRT will continue to employ its policy tools in the form of an effective policy mix to gradually achieve this target in the period ahead. While passing through a period of low predictability on a global scale, the most important task that falls on our part is to move towards our primary objectives by maintaining the principal focus. I have full confidence that, in the following period, we will continue to progress gradually but surely on the way to price stability with the help of the steps to be taken in structural areas.