Inflation in Turkey exceeds 17% after the lira’s decline

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Data on Monday showed that Turkey’s inflation rate rose to 17.14% year-on-year in April, touching its highest level since mid-2019, and continuing pressure on the central bank to maintain a hard-line policy.

On a monthly basis, the Turkish Statistics Institute said that consumer prices rose 1.68% compared to expectations of the “Reuters” poll of 1.80%, according to what the agency said.

In March, the annual inflation rate was 16.19%. The forecast for Nissan was 17.3%, well above the official target of 5%.

The data showed that the consumer price index rose 4.34% on a monthly basis in March, an annual increase of 35.17%, and the central bank said in its quarterly report, last week, that inflation will decrease after April and the gradual decline will continue until the end of the year.Last month, Erdogan’s dismissal of the former governor caused foreign investors to flee, fearing he would quickly cut interest rates. But promises made by the new conservative recently of tough policy and a drop of more than ten percent of the pound convinced analysts that the policy would remain stable for now.

In a Reuters poll of 19 economists, they expected, all but two, to keep the bank, under the leadership of Governor Shihab Kafcioglu, on the one-week policy rate unchanged this week before a possible easing after the middle of the year.One economist expected a reduction to 18.50% and another expected a cut to 17%, and the former governor had raised interest rates last month by 200 basis points, which exceeded expectations, to levels they last touched in mid-2019, in order to face inflation that exceeds 16% and support the currency. .

Before taking office, Kavcıolu had openly criticized the hard-line stance and adopted Erdogan’s non-conservative view that high interest rates cause inflation. Erdogan abruptly fired three of the bank’s governors within two years, damaging monetary credibility.





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