A money changer counts Turkish lira banknotes at a currency exchange office in Ankara, Turkey, September 2021. File picture: REUTERS/CAGLA GURDOGAN
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 rose 36.08% in December, the most 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/$ at 10.04am 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% in December from 24.05% in November.
The central bank will hold its next rate-setting meeting on January 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 depreciated about 44% against the dollar in 2021, the worst among all major currencies tracked by Bloomberg
More stories like this are available on bloomberg.com Bloomberg
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.