Turkey's central bank will monitor risks related to the foreign exchange market and do what is necessary to ensure an inflation target of 5 percent, it announced in its policy framework published on Wednesday.

The bank said that the main goal for 2022 is to ensure price stability and achieve the medium-term inflation target of 5 percent jointly set with the government.

The one-week repo auction rate is the bank's main policy instrument for reaching the inflation target.

The bank will use reserve requirements to support its pursuit of price and financial stability objectives, it said, adding that negotiations to sign swap agreements with other central banks would continue.

"In this framework, the Reserve Options Mechanism will be completely terminated in 2022, and costs of foreign currency liabilities will be increased, while mechanisms to promote Turkish lira deposits will be prioritized," the report said.

The bank also aims to strengthen its foreign exchange reserves and continue to build up reserves in 2022 as long as market conditions are suitable.

In 2022, the Monetary Policy Committee (MPC) will hold 12 meetings for policy decision, with the first one to be held on January 20, according to the announcement.

The lira hit an all-time low of 18.4 to the dollar on December 20, after weakening for months due to fears of surging inflation following a series of interest rate cuts sought by the president.

Annual inflation is forecast to have hit 30.6 percent in December, a Reuters poll found, breaching the 30 percent level for the first time since May 2003.

(With input from Reuters)