A holistic approach incorporating joint efforts of all stakeholders in the disinflation process can ease the policy trade-offs and thus make a significant contribution to achievement of lasting price stability at lower costs.
Financial conditions, conceptually, summarizes whether financial indicators such as interest rates, exchange rates, asset prices and credit conditions are being restrictive or accommodative on economic activity.
Ali Hakan Kara,Fethi Öğünç,Çağrı Sarıkaya,Mustafa Utku Özmen
The degree of exchange rate pass-through to inflation may vary depending on the economic environment. Currently, the weak economic activity is limiting the exchange rate pass-through, whereas the behavior of exchange rate expectations pose upward risks.