Turkish Central Bank: Inflation Expectation Rises to 7.9 Percent

yilinCentral Bank ‘s Chairman Erdem Başçı announced the inflation expectation rose from 6.9 percent to 7.9 percent, by one percentage point, on Oct. 28.

Having spoken at the Central Bank meeting, where the 4th Inflation Report of the year was released, Başçı said, “Inflation is expected to be between 7.4 percent and 8.4 percent with mid-point of 7.9 percent by the end of 2015, and be between 5.0 percent and 8.0 percent by mid-point of 6.5 percent by the end of 2016, with 70 percent probability.”

“Inflation at the end of the third quarter of 2015 was higher than the July Inflation Report forecast due to developments in food prices and exchange rate, he said. “Exchange rate pass-through has been limited due to the tight monetary policy stance and the mild course of domestic demand.”

“Medium-term forecasts are based on the framework that tight monetary policy stance will be maintained until there is a significant improvement in the inflation outlook” Başçı added. “It is assessed that the annual loan growth rate will continue to hover around reasonable levels thanks to the tight macroprudential measures.”