Turkish inflation climbs to two-year high, likely delaying interest rate cut
Turkey’s annual inflation rose higher than expected in July to 18.95%, just shy of the Central Bank’s key interest rate, reducing prospects for an early interest rate cut this summer.
ISTANBUL — Turkey’s annual inflation rate rose higher than expected in July, reaching a two-year high of 18.95%, according to data published Tuesday by the Turkish Statistical Institute (TurkStat).
Driven by growing food and transportation costs, annual consumer prices climbed 1.42% last month, up from 17.53% in June, surpassing a Bloomberg forecast for 18.6% in July.
The accelerating rise of consumer prices places Turkey’s inflation rate just shy of the Central Bank’s 19% key interest rate, reducing prospects for early rate cuts that have been repeatedly touted by Turkish President Recep Tayyip Erdogan.
On June 2, Erdogan said interest rates should start falling “around July or August,” adding it was “imperative” the Central Bank ease credit to help boost the nation’s slow economic recovery amid the resurgent COVID-19 pandemic.
