IMF:"Turkey's new monetary policy strategy is a step in the right direction"

Though Turkey's new monetary is a positive one, capital inflows may exacerbate domestic dynamics and add to financial imbalances and vulnerabilities, warns the International Monetary Fund in its new Regional Economic Outlook for Europe. "Turkey's new monetary policy strategy has achieved some success, but its ability to contain inflation and credit growth has yet to be proved," says the report. "The strategy has been effective at moderating exchange rate pressures, as can be seen from the decoupling of the lira from other emerging market currencies since mid-November."