Turkish Central Bank: How its credibility has been weakened and what this means for financial markets

Turkish Central Bank: How its credibility has been weakened and what this means for financial markets

According to a report by amp2.wiwo.de, the Turkish central bank has shown itself to have little credibility in the past, which led to inflation rising to 83.4 percent in September 2022. The repeated failures and unclear communication have further undermined financial market confidence.

This development has a significant impact on the market and the financial industry. The lack of credibility of the Turkish central bank affects inflation rates, the currency and investor confidence. High inflation may cause uncertainty in the market and contribute to investors withdrawing their capital from the Turkish economy.

It is becoming clear that decisive action is required from the central bank to regain the confidence of financial markets and bring inflation under control. The unclear communication and unwillingness to sacrifice growth for the sake of disinflation increase uncertainty and contribute to worsening inflation.

It remains to be seen how the Turkish central bank will act in the future to regain the confidence of the financial markets and control inflation. It will be crucial to send clear and consistent messages and act decisively to restore credibility and contain inflation.