Turkish Central Bank: Inflation to remain above target for some time.

By bne IntelliNews November 27, 2013

Inflation indicators are likely to hover above the inflation target for some time due to the exchange rate volatility observed during the recent months, the Central Bank said in the minutes of the latest monetary policy committee (MPC) meeting. The government’s inflation target is 5% for 2013 and 2014.

Consumer prices rose 1.8% m/m in October (market consensus estimate: 1.34%), bringing the annual CPI inflation rate to 7.71% from the previous month’s 7.88%. End-year inflation expectations jumped to 7.71% in November from 7.39% in October, the Central Bank’s monthly Expectations Survey showed last week.

At the MPC meeting on November 19, the Central Bank kept its policy rate (one-week repo) unchanged at 4.5%. This was a widely expected move. Moreover, the overnight borrowing and lending rates were held constant at 3.5% and 7.75%, respectively.

The cautious monetary policy stance should be maintained until the inflation outlook is in line with the medium term targets, the Bank said in the minutes. Given the recent developments in monetary and financial conditions, monetary policy stance is just appropriate, however, caution should be exercised against developments that may worsen the inflation outlook, the Bank added.

Recent data point to moderation in final domestic demand for the third quarter while on the production side, economic activity experienced a mild slowdown during Q3, the Bank said.

The Bank also stressed that the present policy framework was contributing to the improvement in the current account balance and moderate decline in the current account deficit excluding gold trade was expected to continue.

The cautious monetary policy stance, recently announced macroprudential measures, and weak capital flows have led to a notable tightening in financial conditions, which is expected to bring down the loan growth rates to more reasonable levels in the forthcoming period, the Bank said.

Related Articles

Turkey's negotiations for Russia's S-400 missile system at "final stage"

Turkey's talks with Russia on the purchase of the advanced S-400 surface-to-air missile defence system have reached ... more

Turkey’s opposition to appeal decision on unstamped referendum ballot papers

Turkey’s main opposition party, the Republican People’s Party (CHP), said on April 21 it was filing an appeal with the Turkish Court of Appeal which would demand the reversal of ... more

Istanbul stock exchange defies all woes, search for "The Dude" goes on

The Istanbul stock exchange’s benchmark BIST-100 index passed the 92,000-level on April 20 despite the controversial outcome of the weekend’s constitutional referendum and the extensive set of ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss