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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