Declaration of minimum wage of the Governor of the Central Bank
Central Bank (CBRT) President Şahap Kavcıoğlu spoke at the Turkey 2023 & Money Talks summit.
Kavcıoğlu said: “Our studies show that raising the minimum wage will not have much effect on inflation and prices, part of that has already been factored into prices,” Kavcıoğlu said. We do not believe that the new minimum wage will have an impact on prices. Although the minimum wage is high, there are periods when inflation is low.
FOOD PRICES EXPLANATED
Kavcıoğlu said: “At this point, all the reasons for rising inflation are behind us.”
Kavcıoğlu said, “Food prices are in a situation outside of our projections” and said, “I think this price volatility will start with the measures taken and downward increases in food prices will start.”
PROBLEM OF ACCESS TO FINANCING
The headlines of Kavcıoğlu’s speech are as follows:
* (Access to finance is a problem) This debate has lasted for years. The business world is also right in its own way. You want to get the cheapest financing in the longest term. The bank is also trying to figure out how to give you the most risk. The rules established by the regulatory authority are that these two parties meet in one place.
* With the rules that we have brought to ensure this meeting, we both decongest bank balances and provide access to long and cheap financing. When we look at it from this aspect, we see that macroprudential measures have very positive results.
‘KOR PROTECTED TANK HAS NO LOAD’
* The Protected Deposit in Currency has no charge for the Central Bank.
* We receive currency from the citizen. So we operate a reserve mechanism. KKM is one of the reserve items. It is an action we take to increase the reserve.
* Gains and losses are not taken into account when making this calculation. The purpose of central banks is not to make a profit or a loss. It is running monetary policy with the reserves they create. By creating this reserve, you do not calculate how much I bought from here. In the past, there have been currency auctions, you buy gold from ore… When you buy a reserve, your account is the day you buy it. Therefore, since this process, which we call currency protection, is a method of increasing central bank reserves, there is no burden.
DISCLOSURE OF MONEY OF UNKNOWN SOURCE
On the other hand, according to the balance of payments data announced by the CBRT, the item of net errors and omissions that indicate inflows of money of uncertain origin was $3.960 million in August.
This figure was realized in 28.310 million dollars in the period January-August. In the first 8 months of last year, this figure was 13.5 billion dollars.
Kavcıoğlu had the following to say regarding discussions on this issue:
* It is a pity that such a debate has arisen. There are some explanations that seem to know these things, or say they know these topics, but it’s not clear how they got this information. These are an explanation that has no economic basis; There is also the political side. They can access more precise information, they can call us. Instead of rejoicing in the results of integrated policies (which Turkey has implemented in the economy), targeting elsewhere hurts Turkey.
‘WHERE YOU SUPPORT POLICIES…’
* While there were power shortages in Europe and many parts of the world, Turkey did not experience any power shortages or interruptions. There is a Turkey that can pay your energy bills. This is the result of the measures taken within the framework of the integrated policy.
* In the first 6 months, Turkey gave a net error of $13.8 billion, while the US gave a net error of $159.8 billion and Germany $88 billion. Considering the ratios in GNP, they are also low. Our net error, which was 10.5 last year, has now reached 1.3. Why it happens: Since Turkey is not present in the system where other countries are members and bank figures are given, the numbers are not fully reflected and come from behind.
* At the point where the exchange rate and interest balanced, our reserves also increased. We have become a country with a current account surplus. When you support these policies, you are citing your net error.