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Another headache for the Turkish central bank.

Annual inflation in the country leapt to hit 10 per cent for the first time in nearly five years in February, heaping further pressure on monetary policymakers who are battling with a slowing economy and a weakening currency.

Consumer price inflation hit 10.13 per cent last month, accelerating from 9.22 per cent, and the highest level since March 2012. The reading is above economists’ forecasts of around 9.7 per cent, according to estimates compiled by Bloomberg.

The Turkish central bank (CBRT), which targets annual price growth of around 5 per cent, has been fighting surging inflation which has been pushed up by the country’s weakening exchange rate.

Despite ending February as one of the best emerging market currencies – strengthening over 3 per cent against the dollar – the lira took a fresh hit yesterday, dropping over 1 per cent.

Investors have taken a dim view of the lira, plunging it to record lows this year amid a swirl of security fears and unprecedented political reforms. Turks will vote in a referendum to overhaul their constitution and award sweeping executive powers to the country’s president in April.

The lira enjoyed its best month in just under a year in February having started 2017 with the title of the world’s worst performing major emerging market currency.

The currency has stabilised somewhat after the central bank has engaged in a host of unorthodox measures to help support the waning lira, including raising the country’s overnight lending rate – which tightens monetary policy – and cutting foreign exchange reserve requirements for its domestic banks.

Today’s inflation reading it likely to intensify the pressure on policymakers to raise interest rates again this month.

Second chart via Bloomberg

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