Bravo Central Bank bravo!

should remind the Central Bank that the TC in front of its SOMEONE name is an abbreviation of the words “Turkish Republic”, that is, this institution basically bears the responsibility of “serving Turkey”. I think it needs that reminder, so that it no longer takes decisions that will harm the country’s economy.

But now the 23rd of September is over and it is done!

Turkey can never get rid of taking unexpected steps for the sake of its interest obsession. More precisely, the politicians want it, and the Central Bank takes these steps.

And the Central Bank literally lives in space. The bank continues to display strange approaches as if it did not even know about the medium-term program published by the government.

INTEREST DOWN, FX RATES UP

The Central Bank Monetary Policy Committee cut the policy rate from 19% to 18% at its meeting last week. The promise that the policy rate will continue to be set at a level above inflation was also forgotten. Let’s not be unfair though: they didn’t do this all at once; they already gave the signal by saying “core inflation, not headline.”

•f course, you must be wondering why the interest rate was lowered, what was the reason...The huge Central Bank should know something!

First of all, the Central Bank touches on this:

“Supply-side factors such as increases in food and import prices and disruptions in supply processes, increases in administered/directed prices, and demand developments due to opening in the economy was effective in the recent rise in inflation. These effects are considered to be caused by incidental factors.”

Increases in import prices, in other words, price increases depending on the exchange rate... If this is important, what should come to mind when the foreign exchange increased by 1.5% after the decision you took yesterday? So, will the increases in import prices reverse?

This has happened, but there are enough reasons to lower interest rates:

“•n the other hand, the slowing effects of strong monetary tightening on loans and domestic demand continue. The tight monetary stance has started to have a contractionary effect on commercial loans beyond anticipated levels. In addition, the macroprudential policy framework has been strengthened in order for retail loans to return to a moderate course. The Committee evaluated the analyses aimed at decomposing the effects of demand factors, core inflation developments and supply shocks that can be affected by monetary policy. In this context, it has been evaluated that there is a need for an update in the monetary policy stance and it has been decided to cut the policy rate.”

Was there a need for so much detail and equivoction? It would be enough to be direct and say, “We were asked to lower the interest rate, so we lowered it”!