Nebati: We anticipate that the cost of KKM will be limited in the future
Minister Nebati assessed the effects of the KKM implementations, which were announced by President Recep Tayyip Erdoğan on December 20, 2021, and were delayed by one year in the markets.
Nebati said: “We anticipate that the cost of KKM, which supports the acceleration of the downward trend of inflation, will remain restrained in the future as well.”
As of March, when the first payments were made in KKM, a total of TL 91.5 billion was paid to KKM owners from the budget. It is not yet known how much the Central Bank pays for revolving accounts.
Nabati’s responses to questions about KKM are as follows:
“We put this instrument into practice in a difficult period in which many factors threaten our economy, such as exchange rate volatility that threatens our financial stability, growing uncertainty in the world economy, and cost inflation fueled by supply constraints. in the post-pandemic period.
Although the entire world is rapidly heading towards recession as a result of the vicious circle of rising inflation, interest rates and exchange rates, with the contribution of this practice, we move beyond economic stagnation and continue our fight against inflation. with a human-oriented approach. by increasing employment.
WE BELIEVE IT WILL BE LIMITED
We continue to transparently share the cost of KKM, for which a support payment of TL 91.6 billion was made this year. We anticipate that the cost of KKM, which helps increase predictability and accelerate the downward trend of inflation compared to its capped cost, will also remain capped in the future.
In the fight against inflation under the Turkish economic model, we prefer policies aimed at establishing permanent price stability without allowing risks such as decreased production capacity and increased job losses to threaten our economy. . If there were increases in interest rates, investments would be delayed, employment would contract, production would decrease and our country’s potential would be completely limited.
Within the framework of our model that will make our country grow through investment, employment, production, exports and the current account surplus, we continue the investments that will increase the added value of our exports and the weight of knowledge, technology and innovation in production and will support production. activities that increase employment. Recently, we have begun to see positive results from the policies we have implemented within the scope of the model. We see that we have entered a downward trend in inflation after the peak in November.
‘INCORRECT INCREASE WITH MARKET FACTS’
After the epidemic, inflation negatively affected all developed and developing countries and reached all-time highs. One of the main determinants of inflation in our country is the exchange rate. Last year there were increases in the exchange rate that did not match the realities of the market.
While disaster scenarios were written about our economy before the KKM, the whole picture changed with the stability provided by the KKM. By stabilizing the course of exchange rates, we prevented inflation from accelerating further, and even allowed it to enter a downward trend.
No one should doubt that there will be serious declines in inflation in the coming period with decreased volatility in the exchange rate, normalization of commodity prices, and increased confidence in the Turkish lira.” (AA)