Central Bank President: High inflation erodes wages.

The President of the Central Bank of the Republic of Turkey (TCMB), Fatih Karahan, announced the last inflation report of the year. Karahan responded to a question regarding the minimum wage increase after the inflation report. He stated, "It is not true that we said something else 'behind closed doors' as claimed." The TCMB President emphasized that they are not decision-makers regarding the minimum wage increase.

The statements of TCMB President Karahan are as follows:

(Minimum wage) It is not possible for us to make an assessment like - it should be this way - and it would not be correct; we are not decision-makers. Just as we are not a part of this board, we do not make any official or unofficial recommendations. In a high inflation environment, wages erode. What we need to do is to reduce inflation permanently and ensure stability. There has been no surprising situation on the managed-directed price side; we are going through a process where coordination is at a high level.

"WE HAVE TO SWITCH TO FORWARD INDEXING"

TCMB Vice President Cevdet Akçay said, "At some point, we definitely have to switch to forward indexing, both in the public and private sectors; it has to come into play at some point. I believe this conjuncture is a suitable period for that. It is not easy to overcome the traumas from the past and the broken expectations," he said.