IMF: Turkey Should Sustain Monetary Discipline. The International Monetary Fund (IMF) has called on Turkey to maintain its tight monetary policy until inflation is brought down to targeted levels. In its latest assessment, the IMF stressed that sustained, restrictive monetary measures are necessary to stabilize Turkey’s economy and curb soaring inflation rates, which have plagued the country in recent years.

Turkey’s central bank has been raising interest rates since June in an effort to counter inflation, which hit 58.9% in September 2023. The IMF praised these steps but cautioned that any premature easing of monetary policy could reverse recent progress. The organization emphasized that a long-term commitment to tight policies is essential to restore price stability and regain market confidence.

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IMF officials pointed out that inflation remains far from Turkey’s target, despite the recent policy changes. They also highlighted the need for complementary structural reforms, including fiscal discipline and stronger independence for the central bank. The IMF urged Turkey’s policymakers to continue tightening fiscal policies while avoiding measures that could undermine the effectiveness of their monetary strategy.

Turkey has faced a turbulent economic period in recent years, marked by high inflation, currency volatility, and declining foreign reserves. The central bank’s decision to increase interest rates, however, has been seen as a turning point in addressing these issues. The IMF acknowledged this progress but reiterated that Turkey must avoid premature policy shifts that could destabilize its economic recovery.

The IMF also noted that external factors, including global economic conditions and fluctuating commodity prices, could affect Turkey’s inflation outlook. It urged the government to remain vigilant and ready to adapt policies as needed.

As Turkey continues to grapple with its inflation crisis. The IMF’s advice underscores the importance of staying the course with strict monetary policies. With inflation still high, the road to economic stability remains challenging. But the IMF believes that with disciplined efforts. Turkey can eventually reach its inflation targets and foster long-term growth.