Year-end inflation forecast rises to 7.02 pct
Posted by meb at March 11th, 2008
Turkey’s inflation rate probably will end the year at 7.02 percent, according to the Central Bank’s survey of businesses and economists. The forecast jumped from 6.54 percent two weeks ago, the Ankara-based bank said on its Web site Sunday. The estimate for inflation in 12 months’ time rose to 6.03 percent from 5.99 percent, and the rate in two years’ time was forecast at 5.32 percent, up from 5.2 percent. The increase in inflation expectations follows an unexpected jump in consumer prices in February, which pushed the annual rate up to 9.1 percent, the highest in nine months. The Central Bank is seeking to bring the rate down to 4 percent under an International Monetary Fund-backed program. The February price data, announced on March 3, has left economists divided as to whether the central bank will continue a series of interest rate cuts when it meets March 19. The bank has reduced the rate in each of the past six months, lowering it by 2.25 percentage points to 15.25 percent. Turkey’s economy probably will grow 4.6 percent, the survey showed. That’s the lowest forecast this year, and down from 4.7 percent in the previous survey.
Turkish lira posts biggest weekly decline
Turkish lira (YTL) posted its biggest weekly decline against the dollar in a month as a drop in European stocks damped demand for emerging-market assets. The Turkish currency fell to a six-month low versus its U.S. counterpart yesterday as the country’s benchmark the Istanbul Stock Exchange (IMKB-100) index slipped 7.2 percent this past week to the lowest level in a year. The lira also weakened as corporate bond risk in Europe soared to a record, reducing demand for higher-yielding currencies. “Whichever market you look at there is weakness,” said Agata Urbanska, an emerging-market currency strategist in London at ING Bank NV. “At this point I wouldn’t touch anything.” The YTL fell 3.2 percent this past week to 1.2415 per dollar at 6:42 p.m. Thursday in Istanbul, after earlier sliding to 1.2655, the lowest level since Sept. 18.
Source: Turkish Daily News
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