"Considering the upside risks to inflation expectations, pricing behaviour and the medium-term inflation outlook associated with these developments, the MPC has decided to implement a front-loaded and strong additional monetary tightening" read the summary and added:
"The tight monetary policy stance will be maintained decisively, taking into account the end-2021 forecast target, for an extended period until strong indicators point to a permanent fall in inflation and price stability. In regard to the indicators pointing to a permanent fall in inflation and price stability, indicators for the underlying trend of inflation and pricing behaviour, diffusion indices, demand and cost factors, and inflation expectations will continue to be monitored closely for their compatibility with the targets in the forecast horizon.
"The interaction of the risks on the inflation outlook caused by the recent acceleration in loans, the increasing volatility in financial markets due to rising global inflation expectations, and the increase in international commodity prices with the pricing behaviour and inflation expectations will be closely monitored. Additional monetary tightening will be delivered if needed."
The balance between the monetary policy rate and actual/expected inflation will be sustained decisively to maintain a strong disinflationary effect until permanent price stability and the 5.0 percent target are reached, according to the CBRT summary, adding that, sustaining the tight monetary policy stance in such a manner, besides attaining permanent price stability, will foster macroeconomic and financial stability positively by facilitating the fall in the country risk premium, the reversal in currency substitution, the accumulation of foreign exchange reserves and the perpetual decline in financing costs.
"Demand and cost-side effects remain significant for inflation given credit market and economic activity indicators, as well as exchange rate volatility and developments in import prices" read the summary and went on as follows:
"The outlook for domestic demand, international prices and global risk appetite heighten the risks arising from external financing needs to the balance of payments. In formulating the monetary policy towards the target of price stability, the Committee will continue to follow an approach that also addresses the risks to financial stability.
"The Committee reiterated its judgement that in order to achieve price stability, strong policy coordination and a holistic macro policy mix involving all stakeholders are required.
"In its decision-making process, the CBRT adopts a framework with a medium-term perspective, based on analyzing all factors affecting inflation and the interaction between these factors."