Inflation targeting

Monetary and fiscal policies will be used in the fight against inflation, according to the statement released after the Economy Coordination Board (ECB) meeting.

The board, chaired by Vice President Cevdet Yılmaz, convened on Oct. 30.

Traders in markets are looking ahead to the Federal Reserve's summer conference for signs of whether the U.S. central bank thinks inflation is under control or more interest rate hikes are needed to cool inflation.

Fed officials have used the Jackson Hole, Wyoming, conference in previous years to indicate changes in policy direction.

The government aims to bring the inflation rate to down to single digits in 2026, Vice President Cevdet Yılmaz has said, reiterating that the new medium-term program (MTP) will be unveiled in September.

A US central bank official has said that more interest rate hikes "will likely be needed" to bring inflation down further, shortly after policymakers lifted rates to the highest level since 2001.

Lending in Bulgaria remains high against the backdrop of another increase in interest rates by the ECB. The goal of the central bank is to reduce inflation to 2%, but the forecasts are that it will remain high for a long period of time, commented President Christine Lagarde.

The U.S. Federal Reserve raised its benchmark lending rate on July 26 to the highest level since 2001 to tackle above-target inflation, and signaled it could hike again later this year amid improving economic prospects.

The Central Bank raised its end-2023 inflation forecast to 58 percent from 22.3 percent in its previous report, its governor, Hafize Gaye Erkan, said on July 27, vowing to continue the bank's gradual monetary tightening.

Members of the Central Bank's Monetary Policy Committee will meet on July 20 to decide about its key interest rate.

At the MPC's June meeting, the policy rate - the one-week repo auction rate - was lifted from 8.5 percent to 15 percent. This was the first rate hike since March 2021.

Treasury and Finance Minister Mehmet Şimşek has revealed that the government's economy program will focus on three main factors with an aim to fight inflation and bring financial stability to the country.

Fears that the British economy is heading for recession mounted sharply after the Bank of England raised borrowing costs by more than anticipated.

The Bank of England on June 22 decided to lift its main interest rate by half a percentage point to a fresh 15-year high of 5 percent.