Central Bank of Turkey: Assessing Economic Performance in Global Context - Research Paper

Introduction

Central Bank of Turkey has the primary objective of the Bank as achieving and maintaining price stability. There has been a downtrend in the global economic activity that began in the second quarter of 2018 and has continued through 2019. Other countries such as the US and Japan have had a favorable growth of performance with advanced economies that have displayed a better outlook. However, the downturn has been in the emerging economies of Eastern Europe and Latin America. This paper will to focus on the inflation side and the reports published on the platform and how the economy of Turkey is affected from this perspective.

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The increase in the headline inflation rates was at a global scale in the second quarter of 2019 where the emerging markets led. There was a fluctuation in the commodity prices during this period. The risks in the sector of crude oil continued to strengthen as a result of the high levels of uncertainty over the global trade and the unfavorable outlook in economic activity. There were weak prospects for the global economic activity and the high uncertainty that led to depression in the commodity market while there was restriction on the spillover on wage increases.

Economic activity posted some recovery in the first quarter of 2019 as projected in the April Inflation Report. In this period, gross domestic product (GDP) contracted by 2.6% year-on-year but expanded by 1.3% quarter-on-quarter in seasonally and calendar-adjusted terms. Accordingly, aggregate demand conditions are expected to continue to contribute to disinflation. From other economies while or as the Turkey's Country Risk best deviated negatively.

In the second quarter of the year 2019, the consumer price rises fell by dint of 3.92 points that is compared to 15.72%, and this is compared to the culmination of the preceding quarter. In regards to the monetary policy as well as the financial markets, it is clear and evidential that during the begin or first half of the year there was the maintenance of the monetary policy posture in contradiction of the jeopardy to the stability of price, as well as kept or maintenance of the one week repo sale rate endless at a percentage of 24 whereas between the month of May 9th as well as 20th, there was a suspense of the weekly repo public sale in financial markets (Bayramoglu, Tay, and Allen, p1-14, 2017). In regards to the monitory policy point of view however, it was accentuated that the strong point of the monetary tightness should or will be strongminded to make sure or to ensure that the continuance of the disinflation progression. Owning the CBRT's tight monetary policy stance, the decline in country risk quality, and e favorable macroeconomic expansions, market attention tariffs ebbed from corner to corner all developments associated with the preceding reportage retro.

In regard to the above discussed paragraph according to the Turkey's internal as well as the external economy, it is evidential and clear that there was and upward or rising of the economy monetary, as in the financial market. In addition from the report, there was also a decrease in line with the expansion in the altercation rate, the oblique unpredictability of the Turkish Lira decline in the contemporary reportage period.

According to the microeconomic developments as well as the assumptions on the inflation, the consumers r price rises fell by 3.99 points, associated to the culmination of the first sector, and extended 15.72% in the subsequent quarter of 2019, worse than that envisioned in the April Price rises Information. In this retro, yearly price rises of the fundamental gage, the B catalogue, mounted underneath the former predictions too as on the report chat. The main divers that led to the decline of the annual price rises were the unprocessed food as well as the core goods in addition to the energy groups. This way by the above means, there may be a possible solution to avoid the declining of the inflation. Turkey should ensure that they avoid or try their best to make sure that they avoid the mentioned drivers that mostly tend to lead the country to the inflation.

On the commodity price, they endured unpredictable in the second quarter of the year 2019. Therefore, the uptrend in the preliminary quarter of the year sustained up until the close of April. Then, they deteriorated in the middle of tumbling vigor amounts, and this tendency was swapped by means of an uptick all over again in the subsequent half of the month of June outstanding mounting bills in vigor, costly metals as well as agronomic merchandises. As a result, product fees recorded a quarter-on-quarter upsurge of 4.2% on ordinary. In this retro, vigor charges flowed thru an middling 7.3% quarter-on-quarter in arrears to the little sordid, while trade metallic, cultivation and valuable metallic fees weakened on regular by 2.4%, 0.9% and 0.1%, correspondingly.

References

Bayramoglu, Arzu Tay, and Larry Allen. "Inflation Dynamics and Monetary Transmission in Turkey in the Inflation Targeting Regime." Journal of Reviews on Global Economics 6 (2017): 1-14.

Eroglu, Ilhan, Mehmet Cinar, and Nadir Eroglu. "An evaluation of the effectiveness of an inflation targeting strategy in Turkey." Economic research-Ekonomska istrazivanja 30, no. 1 (2017): 1536-1552.