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Ağbal responded to questions from members of parliament about the activities of the Central Bank in the TBMM Plan and Budget Committee.
Referring to Article 4 of the Central Bank Law, Ağbal said: “The main objective of the Bank is to guarantee price stability. The Bank determines the monetary policy that it will implement and the monetary policy tools that will be used to guarantee price stability. The Bank determines the monetary policy tools that will be used to guarantee price stability. Supports employment policies. ” used expressions.
Stating that they are determined to use all the tools at their disposal effectively to fulfill the requirements of this task, Ağbal said that the Bank has made all its decisions within the framework of the data set, information and analysis, models and forecasts that has performed within its corporate capacity.
Ağbal noted that he worked in the public for a long time, held different positions, took responsibility and always stood firm in the truth.
Underlining that he was not involved in any business that he could not account for, Ağbal continued as follows:
“This is what lies behind our emphasis on transparency. I have not been involved in any work that I cannot account for, and I cannot share transparently. No one can force me to do this. No one can back down even if I force it. We have come this way, we will continue on this way from now on. In the past, not everyone wanted to take responsibility. There were times, there were people who ran away a lot. There were other people inside and outside talking. We talked about what we talked inside We got together inside and outside. We got into politics, we went to Bayburt town, we sat with people, we went to London with strangers. We attended investor meetings. We were no different than we have been anywhere else. We make a rational decision based on knowledge and strive to account for our current position. “
“You will start by believing in something.”
Naci Ağbal said that, as governor of the Central Bank, they have an agenda to ensure price stability as defined by law.
Expressing that the government has determined the inflation target of 5 percent together with the Central Bank, Ağbal said:
“I believe that at 5 percent. You will start to believe in something. Do not enter a job in which you believe. I say do not believe in anything. In other countries you pinch because the Republic of Turkey is holding the inflation of 1 -2 percent? We, what are we shy? We can do it. We have a process. There are intermediate goals. The bank will advise the Government. It will tell it what to do in the areas of price stability and fiscal policy. The law says: “The Bank is the financial and economic advisor, financial agent and treasurer of the government. “He says.”
Emphasizing that the main responsibility for price stability is the Central Bank, Ağbal continued as follows:
“What the Central Bank will do alone will not provide price stability, but the main responsible for price stability is the Central Bank. The Central Bank” What I do is not enough. “On the contrary, all other actors , government, civil society, opposition, economic agendas will put aside their own responsibility … You should go to Anatolia, go to the feet of the citizen and tell them; what is happening, what to do, why price stability is important. The approaches that we present in the 2021 Monetary and Exchange Policy are actually based on large-scale studies. In fact, we established a very binding, very predictable and accountable framework on exchange rate policy. Therefore, normally, in fact, self-linking does not It is something that is highly desired in politics, the Central Bank is not a political institution, but it is also the same in the bureaucracy, ‘Well, please, we do not compromise, we tied ourselves, we said:’ There is only one tool Political guideline for horse stability. That’s the one-week repurchase rate. “It is an interest broker anyway, LPG will not be another winding road, it will not be. Because if it is going to fight for price stability, like the Central Bank, it will not use another tool. When you have the right tool, you will do what the right tool requires. Sometimes these tools can come to the fore in terms of flexibility, but flexibility has always kept us from getting it right. Let’s not pursue the easy, let’s pursue the difficulty, let’s pursue the truth “.
Stating that the society wants to strengthen the Central Bank’s reserves regarding the accumulation of foreign currency reserves, Ağbal said that this is a fair and correct demand. Explaining that they clearly describe the strategic criteria in the document, Ağbal said: “If we are going to accumulate currencies, it will be transparent, it will be announced in advance, within the plan and program. We will not affect currency movements in the currency market by saying ‘we will accumulate foreign exchange'”. used expressions.
Ağbal stated that the Central Bank will closely monitor both domestic and foreign currency supplies and will initiate it when it sees an area that does not contradict the principles of the floating exchange rate regime determined in the market according to developments there.
“We have established another criterion here. We will not take a reactionary attitude when looking at the instantaneous conditions of the currency market, we will use it if the market finds its own equilibrium and there is the possibility of a strong and continuous supply and demand of currencies. that the market can follow very clearly. There must be an announcement. If the Central Bank reaches this stage, it will share its framework and plan with the public head-on, and it will be transparent. The Central Bank will normally use the currency accumulation tool in the market through purchase auctions. “
“Very strong synchronized work is carried out with fiscal policy”
Stating that 2021 will be a year to be tested for inflation, Ağbal said: “The Central Bank has a policy stance, we have made an adjustment, we have declared that there is a strong adjustment. We have shared the upside risks regarding inflation. very clearly, transparently and clearly with the public in the next period, I am very pleased that this has been appreciated positively. This was in line with the understanding of transparency that we raised, and we started to use our tools, including the policy interest , to manage them. During the year, the Central Bank also began to reduce inflation in accordance with developments and to manage upside risks. It will use all its tools with determination. ” said.
Stating that very strong synchronized work is being carried out with fiscal policy in line with the same goal, Ağbal said:
“We will share with the public the evolution of the inflation path through inflation reports in 2021, in an open and transparent manner, with the risks and reasons. Fiscal policy, steps taken and to be taken in monetary policy, structural reforms that will make a very important contribution to price stability. This is one of the structural factors that make up food inflation. The steps to be taken in many areas, from increasing productivity in the economy, will make a very important contribution to the objective of price stability and will contribute in the long term.Reform preparations that our government carries out in this regard are also very important.
Ağbal stated that there is a credibility gap between the estimation objective set by the Central Bank and the expectation, “The measure of the Central Bank’s credibility is to close this gap.” I speak.
Emphasizing that as we take their steps and positive results emerge in all the indicators that indicate the stability of the economy, then the expectations of the economic actors will turn positive, indicating that long-term investment decisions will start against than initially thought. Ağbal said: “You know, the Central Bank uses its instruments on short-term interest rates, but its main objective is actually to lower long-term interest rates.” found the evaluation.
On the questions about the swap, Ağbal stated that they will start to provide daily information on the swap transactions, which are flowing with a long delay since the beginning of the year.
Central Bank balance sheet sizes
Regarding questions about the bank’s balance sheet size, Ağbal stated that the asset size of the analytical balance sheet was 839 billion TL as of December 23, 2020, “The balance sheet consists of foreign assets 717 billion TL , domestic assets TL 200 billion and the valuation account minus TL 77 billion “. shared his knowledge.
Ağbal stated that the rediscount credits of open cash loans to the banking sector in “Domestic Assets” amounted to TL 141 billion.
“The liabilities of the balance sheet consist of a total of liabilities in foreign currency of 667 billion liras and the money of the Central Bank 172 billion liras. Among the total of liabilities in foreign currency, the deposits in foreign currency of the banks are 534 billion lira, the banks’ TL deposits under the ‘Central Bank money’ are 165 billion lira, the issue is 190 billion lira Negative brand open market operations as shown are also denominate 216 billion pounds.As regards the Central Bank of Turkey’s reserve data on gold reserves as of this moment 42 billion dollars of foreign exchange reserves of 49.8 billion dollars, a total of 91.8 billion dollars. “
Making evaluations about some questions and criticisms about his duties in the past, Ağbal said that taxes are the basis of a state, merchants and citizens do not share their secret business information with anyone, and that this is the only exception that he has the right to tax.
Stating that the state should protect fiscal privacy, which is responsible to the citizen, Ağbal continued as follows:
“There is tax privacy. It cannot be shared with anyone, neither with the tax official, nor with the government, it is used only for tax duty. Therefore, if an institution requests private information about taxes from the tax administration, if not that data is given, the right thing is done. Up to a date. No data was provided, it was done well. but it has a track record, it will hurt the fiscal privacy elements that were cleaned in that dataset and the Turkish Statistical Institute , this data is provided. Therefore, both the state honor debt, do not put a penny of data related to taxes. It is protected, but on the other hand The need for TURKSTAT in terms of revenue accounts has also been satisfied national “.
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