Turkey: Central bank vows to deliver

After yesterdays August inflation, the Central Bank of Turkey acknowledged the significant risks to price stability and vowed to act at its September meeting

Eirini Tsekeridou, OpinionIndustry Expert
Eirini Tsekeridou has been a member of the Fixed Income Research team since February 2008. She started with high yield bonds in W. Europe and the US and currently focuses on issuers from Turkey and the Middle East. Eirini holds a Bachelors degree in Business Administration and a Masters degree in Finance & Accounting from the University of Macedonia in Thessaloniki, Greece and earned her Master in Business Administration (MBA-HSG) from the University of St.Gallen, Switzerland in late 2007.

September 4, 2018

TURKEY

In line with analyst expectations, Turkey’s August inflation reading came in at 17.90 percent year-on-year (y/y), bringing the 12-month moving average to 12.61 percent, much higher than the central bank's 5 percent target rate.

Amid the lira’s depreciation, August inflation in Turkey was driven by furnishing and household equipment, transportation, housing and communication.

In response to the most recent inflation data, the central bank announced its intention to adjust monetary policy at its next meeting on 13 September.

The announcement comes at a time when the central bank’s independence and credibility are being strongly questioned and is a step in the right direction.

However, reform implementation also remains key, and we look forward to the announcement of the details of the medium-term programme.

Any opinions expressed here are the author’s own.

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