Turkish Central Bank Pledges Policy Action to Control Inflation

The transcript discusses the Central Bank's promise to reshape monetary policy amidst rising inflation and economic challenges. Investors expect interest rate adjustments to counter inflation, but political pressures, particularly from President Erdogan, hinder the Central Bank's actions. The situation has led to a crisis of confidence among investors, who adhere to the orthodox view that higher inflation requires increased borrowing costs to slow the economy.

What is the primary expectation of investors regarding the Central Bank's promise?

• To decrease interest rates

• To increase interest rates

• To reshape fiscal policy

• To maintain current inflation levels

What recent data indicates a need for action by the Central Bank?

• Unemployment rate

• Consumer price index

• GDP growth rate

• Producer price figure

What small measures have banks taken in response to the crisis?

• Increased foreign exchange reserves

• Implemented small dial moves

• Introduced new currency notes

• Reduced lending rates

What is President Erdogan's belief regarding interest rates?

• Higher rates fuel inflation

• Lower rates increase inflation

• Higher rates reduce inflation

• Rates have no impact on inflation

What is the orthodox view on handling high inflation?

• Lower borrowing costs

• Implement price controls

• Raise borrowing costs

• Increase government spending