Headline inflation

The Turkish Central Bank cut its overnight lending rate by 25 basis points on Sept. 22, setting aside concerns about inflation in a bid to boost the economy. 
The bank left its benchmark one-week repo rate unchanged at 7.5 percent but reduced the highest of the multiple interest rates it uses to set policy to 8.25 percent.

There was an expectation of a 0.5 percent rise in consumer prices; instead, a drop of 0.04 percent was registered. As it is unusual to see a drop in prices in the month of March, this was an important surprise for the markets. 

Turkey's central bank decided to take a measured step toward simplification as global volatility eased to some extent, reducing the need for a wide interest rate corridor, the bank said on March 25.

According to the bank, improvement in the underlying core inflation trend remains limited, necessitating the maintenance of a tight liquidity stance.      

Standing amid a jumble of food stalls in an Istanbul market, 61-year-old Gül?en Yüce wonders how she can stretch an already tight budget to make ends meet as food prices rise week after week.

Inflation has become a leading economic challenge for Turkey, hitting the pockets of ordinary people.

Except that it is not! It is true that according to official figures released by the Turkish Statistical Institute on July 3, prices fell 0.5 percent monthly in June, lower than expectations of a 0.2 percent fall. As a result, annual inflation fell almost one percentage point, from 8.1 to 7.2 percent.

Inflation in Turkey dropped sharply in June with decreasing food prices, the Turkish Statistical Institute (TÜ?K) stated on July 3, but analysts doubt that a further decline is in store. 

The Consumer Price Index dropped 0.51 percent in June from May, bringing the annual inflation rate to 7.20 percent in June from 8.09 percent in May.

The Turkish Central Bank?s cautious monetary policies along with prudent fiscal and macro-prudential policies are having a favorable impact on inflation, Central Bank Governor Erdem Ba?ç? said in a presentation on April 6.

Turkey's leading indicators did not signal any economic recovery in the first quarter as high food prices worsened the inflation outlook, the Central Bank said March 18.