CBR Governor Karahan Highlights Export Surge from Global Supply‑Chain Realignment

CBR Governor Fatih Karahan emphasized that the recent realignment of global supply chains has accelerated Turkey's export growth while inflation expectations are easing.

Global Supply‑Chain Realignment Fuels Turkey's Export Upswing

Karahan noted that 2022-level import growth has been restrained, translating into a positive trade‑balance impact.

■The reshaping of global supply chains has lifted Turkey's export volumes.

■A slowdown in domestic demand curbed the rise in imports.

■Direct dialogue with regional manufacturers was facilitated through a presentation at the Erzurum Chamber of Commerce.

Inflation Expectations Retreat: Diminishing War‑Era Pressures

Karahan explained that real‑sector inflation expectations, which surged during the war period, have begun to recede, with a broad‑based decline in inflation observed since May 2024.

■Reduced participation in rent and education expenses is supporting the disinflation process.

■Declining workplace‑rent inflation eases cost pressures.

■Consumer and real‑sector inflation expectations are now more stable.

Credit Rates and R&D Spending Under Tight Monetary Policy

Karahan highlighted that credit rates are driven by inflation and its expectations, and that R&D expenditures have risen during periods of tight monetary policy.

■Monetary policy will strengthen disinflation through demand, exchange‑rate and expectation channels.

■Should inflation outlook show a persistent deterioration, policy rates will be tightened.

■The CBR will set rates in line with intermediate targets and the prevailing inflation trajectory.

Zeynep Turan Analysis: Turkish loan rates still hover above 20%, inflating the cost of housing and consumer credit for households. Banks' file fees and credit‑card limit adjustments have not kept pace with the easing of inflation, perpetuating a structure that erodes real purchasing power. A calibrated easing of policy rates is essential to lower credit costs and revive demand in the housing market. Simultaneously, banks must streamline loan applications, make fees transparent, and adopt consumer‑protective regulations. Without these measures, the export momentum highlighted by Karahan could be offset by persistent financial pressures at home.