Turkish Inflation Climbs to Highest Since 2002 Amid Lira Woes
Turkish inflation accelerated for a seventh month in December, driven to a 19-year high by a slumping lira and lower borrowing costs.
Annual consumer inflation rate rose to 36.08% last month, the highest since September 2002 and up sharply from 21.31% in November. The figure was much higher than the 27.36% median estimate in a Bloomberg survey of 19 analysts.
- Monthly inflation was 13.58%, compared with the median estimate of 8.5% in a separate survey
- Producer prices rose 19.08% through the month, bringing annual inflation to 79.89%
- The lira weakened after the report and was trading 3.7% lower at 13.8115 per dollar at 10:04 a.m. in Istanbul
- The acceleration takes Turkey’s benchmark interest rate adjusted for inflation to negative 22.08%, the lowest real yield among emerging markets
- Retail price inflation in Istanbul, Turkey’s business capital, climbed to 34.18% last month from 24.05% in November
- The central bank will hold its next rate-setting meeting on Jan. 20
- Turkey’s decision to slash five percentage points off the central bank’s benchmark rate since September has led to a slump in the lira, which has depreciated around 44% against the dollar last year, the worst among all major currencies tracked by Bloomberg
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