Türkiye’s newly-appointed central bank Governor Hafize Gaye Erkan said there is confidence in the government’s determination to fight inflation, as all units are striving to deal with the problem.

Productive Discussion with Banking Sector

After meeting with the leadership of the Turkish Banks Association, Erkan told reporters in Istanbul that they had a very productive discussion with the banking sector.

They were briefed on the sector’s issues and their requests to simplify the macroprudential framework, said Erkan, who was appointed early this month following Recep Tayyip Erdoğan’s victory in Türkiye’s May 28 presidential runoff.

Working Hard to Combat Inflation

She expressed confidence that all economic units are working hard to combat inflation in line with the government’s economic targets, adding, “I am sure that we will tackle this in a stable, determined and goal-oriented manner.”

Price Stability for Financial Stability

Erkan stressed the importance of price stability for financial stability, explaining that they would combat inflation by ensuring both price stability and financial stability.

Gradual but Steadfast Path to Price Stability

Earlier on Friday, Finance Minister Mehmet Şimşek said Türkiye’s path to price stability would be gradual but steadfast.

Inflation and Lira’s Performance

Annual inflation eased to below 40% in May after touching a 24-year high of above 85% in October last year. The Central Bank of the Republic of Türkiye (CBRT) said inflation will come under further pressure.

The lira weakened as much as 3.3% to a record low of 25.74 against the U.S. dollar at 10:06 a.m. GMT on Friday, after the rate hike fell short of market expectations of a larger initial tightening.

The currency is down some 27.3% this year and was trading at 25.6480 at 10:39 a.m. GMT.