Central Bank to release inflation report this week

ANKARA

Turkey’s Central Bank will release its third inflation report of 2021 later this week on July 29.

In the second report, which was unveiled at the end of April, the bank increased the year-end inflation forecast to 12.2 percent for this year, up from 9.4 percent in the January report.

The figure is expected to fluctuate between 10 percent and 14.4 percent through the end of this year, Şahap Kavcıoğlu, the bank’s governor, told a virtual meeting held to release the bank’s second quarterly inflation report in 2021 on April 29.

In its latest report, the bank also rose the inflation forecast for 2022 to 7.5 percent, up from 7 percent, while keeping the target of 5 percent for 2023.

Turkey’s annual consumer price inflation moved to 17.5 percent in June from 16.6 percent in the previous month, according to the latest official data.

In the face of the stubborn inflation, the Central Bank on July 14, kept its one-week repo rate - also known as the policy rate - steady at 19 percent, in line with market expectations.

“In addition to the recent increases in import prices and administered prices, demand conditions, supply constraints in some sectors, possible volatility in inflation during the summer due to the reopening, and high levels of inflation expectations continue to pose risks to the pricing behavior and inflation outlook,” the bank said in a statement released after the Monetary Policy Committee meeting.

The bank stressed that it will continue to use decisively all available instruments in pursuit of the primary objective of price stability.

“The policy rate will continue to be determined at a level above inflation to maintain a strong disinflationary effect until strong indicators point to a permanent fall in inflation and the medium-term 5 percent target is reached,” it said.