Turkey’s central bank raises end-of-year inflation forecast

(MENAFN-IANS)

Ankara, Jan 28 (IANS) Turkey’s central bank has raised its end-of-year inflation forecast for 2022 to 23.2% from 11.8% in its previous report.

At the meeting to present the bank’s first quarterly inflation report of the year, Turkey’s central bank governor Sahap Kavcioglu highlighted rising international food prices, as well as related factors to the supply side such as drought and supply chain disruptions which have hurt the inflation outlook.

He pointed out that support for the lira is the key objective of Turkey’s current policy review.

Central bank policies will aim to encourage investors to convert their foreign currency savings into Turkish lira, he added.

Turkey’s inflation hit 36.08% year-on-year in December 2021, the highest since 2002.

The country also struggled against the strong depreciation of the national currency on the foreign exchange markets.

The central bank kept the benchmark interest rate unchanged on January 20, ending an easing cycle that triggered a fall in the currency in the second half of 2021.

The Turkish lira lost nearly 44% of its value in 2021 after the central bank cut its key rate by 500 basis points to 14% from 19% since September 2021 amid high inflation.

–IANS

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