The inflation reports from the Central Bank of the Republic of Turkey (TCMB) generally contain information on economic indicators and assessments related to monetary policy. Therefore, their effects can be seen, albeit indirectly, on the cryptocurrency markets. Let’s examine the TCMB inflation reports together!
Insights from TCMB’s Inflation Report
The economic data and monetary policy decisions mentioned in TCMB’s inflation reports generally affect market risk perception and investor confidence. Cryptocurrencies are often considered indicators of risk appetite in global markets. Thus, the economic conditions and monetary policy decisions expressed in TCMB’s reports could have an indirect effect on the prices of cryptocurrencies. The key messages from Dr. Fatih Karahan, the President of TCMB, at the Inflation Report 2024-2 Information Meeting are as follows:
We closely monitor pricing behaviors and inflation expectations. We are determined to maintain our tight monetary policy stance until inflation aligns with our targets. We will definitely not allow a permanent deterioration in the inflation outlook. We closely monitor the effects of monetary tightening on domestic demand through various indicators. Although the main trend of inflation is declining, it has proceeded above the path we anticipated from the year’s first inflation report. We ended the securities facility application as of May 9. By closely monitoring liquidity developments, we will use sterilization tools effectively when needed. Our monetary policy stance and macroprudential framework will ensure that deposit interest rates remain at levels that support the transition to the Turkish Lira and increase savings.
However, if TCMB’s inflation reports indicate high inflation expectations or tightening steps in monetary policy, this generally leads investors to avoid risk and can decrease demand for cryptocurrencies. Similarly, if TCMB’s reports indicate economic recovery or signals of easing in monetary policy, this situation generally increases risk appetite and can support demand for cryptocurrencies.
Impacts on Cryptocurrencies
However, TCMB’s inflation reports do not directly focus on cryptocurrencies and therefore, the impacts on crypto markets may be indirect. Nevertheless, the economic analyses and monetary policy evaluations in the reports generally affect investors’ overall risk perception, which in turn can influence the prices of cryptocurrencies. Consequently, TCMB’s inflation reports can affect the decision-making processes of market participants related to cryptocurrencies, but these effects are indirect and complex.
