The liraization strategy. Consumer inflation at the end of 2021 remained above the uncertainty band set around the 5% target. Accordingly, attached we hereby submit to you the January 2022 Inflation Report, which explains the reasons for the significant deviation of inflation from the targeted path, along with the measures already taken and to be taken to achieve the targets, for your kind information.
Instead of focusing on short-lived immediate gains, the CBRT has initiated a comprehensive monetary policy review process to achieve sustainable and permanent price stability in the long run. The liraization strategy is the most crucial part of this process. This liraization will support the monetary policy instruments in the medium and long-term fight against inflation through three channels.
Firstly, Turkish lira savings will be encouraged through FX-protected accounts and similar tools, and the returns on such accounts will not be allowed to remain lower than their alternatives. It is already obvious that FX-protected savings tools will help with the structural transformation of maturity extensions, addressing the long-standing issue of very short maturities. We expect that the liraization process will provide a lasting contribution to price stability in the medium term thanks to our decisions regarding reserve requirements and FX-protected deposits.
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