Turkish Central Bank governor says inflation will rise until June.

By bne IntelliNews March 28, 2014

Inflation will continue to rise until June, reflecting base effect, the government of Central Bank, Erdem Basci, said in a presentation.

Positive impact of tightening on inflation will be seen later, according to Basci who also expects domestic demand to lose momentum but exports to contribute to final demand. Loan growth has slowed as a result of tight monetary policies, macroprudential measures and weak capital flows, Basci said. The governor also expects a significant improvement in the current account deficit this year.

This week, the Central Bank said in the minutes of the last Monetary Policy Committee meeting there is a risk of a marked slowdown in economic activity. If this risk materialises, reserve requirements, reserve option mechanism and liquidity policies may be utilized, if needed, the Bank noted. The MPC also evaluated the possibility of paying interest to the portion of reserve requirements held in TRY, in the context of the normalization of monetary policy, the Bank said.

Related Articles

Turkish lira’s chronic weakness credit negative for Turkey’s sovereign rating says Moody’s

The chronic weakness of the Turkish lira (TRY) is credit negative for Turkey’s sovereign debt rating and poses ... more

Turkey moves towards extending 21-month-old state of emergency

A senior government official has signalled that Turkey may once again extend its state of emergency. “The need for an extension of the state of emergency is apparent. If parliament approves it, ... more

Russia bringing forward delivery to Turkey of S-400 missile system by six months says Ankara official

The scheduled delivery of Russian S-400 surface-to-air missile batteries to Turkey has been brought forward to July 2019 from the first quarter of 2020, the Turkish undersecretary for defence ... more