A remarkable claim has been made regarding the monetary policies of the Central Bank. interest rate cut
The CBRT did not make any changes in the first 7 meetings of this year, after cutting the interest rate by 500 basis points in the last 4 meetings of 2021. However, at the CBRT Monetary Policy Committee meeting held on August 18, the CBRT made a surprising decision and decided to reduce the one-week repo auction rate, which is the policy rate, from 14 percent to 13 percent.
Pointing out that the government’s inflation target in the Medium-Term Program is 65 percent for the end of the year, Dünya writer Aktaş said on the subject, “Inflation is falling, but prices are increasing. Because in reality there is no decrease in inflation, the decrease is in the rate of inflation,” and the CBRT decided to cut interest rates in December and January. He suggested that he would go.
The Medium Term Program (MTP), in which the economic targets for the 2023-2025 period are determined, was published in the Official Gazette. In the MTP, the 2023 growth target was 5 percent, the 2024 and 2025 growth target was 5.5 percent. The 2022 inflation target was 65 percent. The inflation target was set at 24.9 percent in 2023, 13.8 percent in 2024, and 9.9 percent in 2025.
“December-January illusion in inflation!” According to TUIK data, consumer prices increased by 47.85 percent in the first eight months of this year. In the medium-term program for the 2023-2025 period, the CPI increase in the whole of this year is estimated as 65 percent. In other words, the expected price increase in the last four months is 11.6 percent,” he said.
“THE PRICE WILL NOT STOP…”
Aktaş said, “Let’s say that the price increase has always been at the same rate monthly in the last four months. Accordingly, the expected increase is 2.78 percent. According to the monthly 2.78 percent, the annual rate will be 82-83 percent in September, October and November, and it will suddenly decrease to 65 percent in December. The annual inflation rate will drop from 82-83 percent to 65 percent, but prices will continue to increase even in December, when this situation occurs. And then the same… The price increase will not stop…” used expressions.
Taken from Alaattin Aktaş’s article
Explaining the illusion in inflation in the continuation of his article, Aktaş used the following statements:
“The first part of the chart shows the realization so far this year. The annual rate is going up, so is the consumer price index, which indicates the level of prices. I’m not talking about an imaginary price, a value, this is the official CPI. You can also consider it a price or an average as price.
According to the assumption of a monthly price increase of 2.78 percent, the CPI will rise to 1103 in November. What will happen to the CPI as the annual price increase falls from 82-83 percent to 65 percent in December, 1133! Where is the regression, that is, the price regression! Of course not.
This is the illusion, people will want to be affected by saying “Look how inflation has dropped”.
‘THIS FALL WILL BE DECORATED WITH THE INTEREST REDUCTION’
No one doubts that the annual inflation rate will fall in December and January. Because there were record rates of 13.58 percent in December of last year and 11.10 percent in January of this year. In accordance with the calculation technique, when these rates are replaced by 2.78 percent for December of this year and 1.87 percent for January of 2023, the annual rate will of course decrease. Anyone who knows the four operations can calculate this.
But it should be noted that this regression is not spontaneous, but has come about through intense efforts and precautions. The shortest way to this is obvious; interest deduction.
I don’t know if it happened before; but I am definitely expecting a rate cut in december and january.
First interest rate cut, then inflation decrease!
‘POLITICALLY CANNOT EAT IT’
The statements for Tuesday, January 3, 2023 and Friday, February 3, 2023 are already clear:
“Didn’t we say we will reduce inflation, we said, and here we are. Didn’t we say that if the interest rate goes down, the inflation will go down, we lowered the interest rate even more, and the inflation dropped to 50 percent all of a sudden. Where are those who say that inflation will exceed 100 percent?”