Foreword

Naci Ağbal
Governor

The main objective of the CBRT is to achieve and maintain price stability. Price stability is a prerequisite for achieving sustainable growth, and increase in employment and social welfare. The main contribution of Central Banks to the rise in social welfare is by establishing price stability. In order to achieve low long-term interest rates, price stability must be established permanently. Price stability supports the medium of exchange and store of value functions of the local currency by protecting its value and reduces the need for currency substitution. Once the low inflation environment is established permanently, macroeconomic and financial stability will be ensured through the fall in the country risk premium, the reversal in the dollarization trend, the decline in financing costs and the extension of maturities.

In 2021, the CBRT will decisively implement a full-fledged inflation targeting regime. The monetary stance will remain tight for a long time until permanent price stability and the 5% inflation target is attained. The CBRT will use all available policy instruments completely, promptly, effectively, strongly and decisively to achieve the main target of achieving permanent price stability. Monetary policy decisions will be taken by prioritizing price stability.

The inflation-targeting regime mainly relies on focusing and commitment of all segments of the society on price stability as well as the decisive steps to be taken by the decision-makers and policy-makers. Accordingly, an explicit, inclusive and effective cooperation and communication policy will be implemented to win endorsement for this process from all parties. In this context, committed to the principles of transparency, predictability and accountability, the CBRT will strengthen its policy communication and data dissemination.

The CBRT considers price stability as a prerequisite for financial stability, and financial stability as one of the most crucial factors for price stability. Monetary policy focusing on price stability is seen as critical to also contain macrofinancial risks. In pursuit of the targets of maintaining financial stability and strengthening financial system, domestic and global developments as well as risk factors will be monitored closely with a holistic approach.

The CBRT manages studies to attain the targets laid down in its Strategic Plan with focus areas on “research and communication”, “operational structure”, “technology and infrastructure”, “human resources” and “corporate culture”. Under these headings, the CBRT will not only embody a more efficient and productive organizational structure, but also attain corporate targets by strengthening employees’ sense of belonging and cooperational culture with common values through a communication and coordination policy that will foster the effects of its decisions.

With its independence, deep-rooted history, robust corporate culture, strong organizational structure, qualified human resources and advanced technological infrastructure, the CBRT has always undersigned significant decisions regarding the Turkish economy. I am happy to say I believe that we will stay committed to the principles of fulfilling our duties and responsibilities in the best way and contributing to our economy in pursuit of permanent price stability in the upcoming period as well.