Turkish central bank says inflation expectations not at desired levels

By bne IntelliNews August 19, 2015

Inflation expectations are still above the desired levels and exchange rate movements delay the improvement in the core inflation indicators, said the central bank on August 19 in a presentation to economists.

On the positive side, food and energy price developments help disinflation in the short run, while the decline in import prices limits the pass-through from exchange rates to domestic inflation, the bank noted.

End-year inflation expectations declined to 7.65% in August from 7.71% in July, the central bank’s latest expectations survey showed.

At the monetary policy committee meeting on August 18, the central bank kept the benchmark rate (one-week repo) kept at 7.5%, while it held the ON borrowing and ON lending rates steady at 7.25%, and 10.75, respectively.

Here are the other highlights from the bank’s presentation:

* GDP continues to grow at a moderate pace, driven mainly by consumption expenditures.

* Consumer confidence and investment tendency point to a moderate private domestic demand.

* Exports and imports continue to decline in USD terms, reflecting the movements in USD/Euro exchange rate, slowdown in global demand and geopolitical developments.

* The favourable impact of lower oil prices on the current account balance will be more pronounced in the forthcoming period.

* Further improvement in current account balance is expected in the forthcoming period.

July CPI by Main Expenditure Groups (%)
  Weights m/m y/y
Headline 100 0.09 6.81
Food and non-alcoholic beverages 24.25 0.28 9.25
Alcoholic beverages and tobacco 4.82 1.16 3.28
Clothing and footwear 7.38 -4.97 4.06
Housing, utilities 15.79 0.33 8.15
Furnishings, household equipment 7.78 1.60 8.69
Health 2.57 0.32 6.49
Transportation 15.38 0.41 0.92
Communications 4.38 -0.01 1.19
Recreation and culture 3.54 -0.18 7.72
Education 2.53 0.51 6.15
Hotels, cafes and restaurants 6.98 1.21 13.80
Miscellaneous goods and services 4.60 0.10 9.31
Source: tuik      

Related Articles

Erdogan says he plans talks with lenders on cutting Turkish interest rates

Turkey's President Recep Tayyip Erdogan said on October 13 that he plans to hold talks with both public and private lenders on how to lower interest rates. He did not say, however, when those ... more

Turkey's Erdogan turns fire on US ambassador in diplomatic spat over arrest

Turkish President Recep Tayyip Erdogan has turned his fire on the US ambassador to Turkey for the ... more

Turkey-based Eurasian development bank ETDB signs memo to boost return to Iran

The Central Bank of Iran (CBI) and the Turkey-based ECO Trade and Development Bank (ETDB) have signed a memorandum on strengthening bilateral ties, the CBI said on October 10. ETDB is a Eurasian ... more

Dismiss