People familiar with his remarks said CBRT Governor Fatih Karahan told investors
in Bangkok that Turkey is allowing the lira to depreciate faster to avert a
larger long-term devaluation. He said FX pass-through to inflation has weakened
as economic activity has slowed. Speaking at the IMF and World Bank annual
meetings, Karahan stressed the need for a sustainable exchange-rate framework,
noting his term ends in Feb 2028 and he wants to avoid a successor feeling
compelled to deliver a sharp devaluation. He added any faster depreciation must
preserve domestic savers’ perception that holding lira yields attractive
returns.
