Price stability needs structural policies: Turkey

By Muhammed Ali Gurtas

BURSA, Turkey (AA) - Turkey needs a more comprehensive approach to price stability in the light of experience gained in the last ten years, the country's central bank governor said on Saturday.

Speaking at the closing session of the Uludag Economy Summit in northwestern Bursa province, Murat Cetinkaya told that the central bank is attaching higher importance to the structural policies while there is a global concern about sustainability.

Cetinkaya stated that many of the problems that had been encountered by the developed countries had not been observed in Turkey, during the post-global financial crisis period.

“For instance, the accessibility problems to financial tools due to the high levels of financial leverages were not experienced in our country,” he said, adding:

“Also, Turkey does not have any efficiency problem related with aging population. But there are some fields that we can develop ourselves, like price stability."

Pointing out the required comprehensive approach, Cetinkaya stated that it has three important components.

"First of all we should diagnose the factors of the inflation other than the monetary policies and we should increase the social awareness about this issue."

"Establishing a platform to share the ideas of all related institutions comes in the second place," he said. "As a third component, we have to follow a decisive monetary policy that should be built with a strong communication."

Cetinkaya stressed the importance of price stability which has a multidimensional interaction with a lot of problems and said: "Deepening of the financial markets, a more efficient and balanced distribution of finance and dollarization issues are interacting with price stability in someway."

"These issues are also directly correlated with the efficiency and sustainable economic growth. Therefore, our efforts for price stability are critical for economic development," he added.

Governor Cetinkaya also underlined the importance of other precautions to improve external balance permanently.

"Those actions can be listed as increasing the level of domestic savings, supporting efficiency in production process, ensuring flexibility in the labor markets and reducing the dependency on imported intermediate goods," he said.

Cetinkaya noted that, although there were many domestic and international shocks in recent years, the Turkish economy had performed quite well with its prudent monetary policy and solid financial structure.

"However, we should not lose our focus to take necessary steps to strengthen the foundations of the economy in a period in which the global uncertainties are very high," he said.

"As the Central Bank, we are preserving our comprehensive approach and will continue to support this process. The Turkish economy is on the right track and with the right reforms, hopefully, the foundations of our economy will continue to be strong," Cetinkaya added.