Turkey’s key inflation gauge rose for a fourth straight month to 12.37 percent in February, data showed on Tuesday, testing the central bank’s resolve to keep stimulating the economy in the face of a weakening lira and a worsening conflict in Syria, Reuters reported.
The rise in both yearly and monthly consumer price measures was less than expected, according to the Turkish Statistical Institute (TurkStat), which could leave the bank optimistic that inflation will reverse and dip toward 8.2 percent by year end.
Many analysts still expect the central bank to ease monetary policy this month after it aggressively cut the key interest rate to 10.75 percent from 24 percent in July. The government has pushed for single-digit rates to boost a rebound from recession.
But Turkey’s standoff with Russian and Syrian government forces in Syria’s Idlib region, combined with investor concern over the global coronavirus spread, has sliced the Turkish lira’s value by more than 4 percent so far this year.
A currency crisis in 2018 sparked a recession and sent Turkish inflation surging to a 15-year high above 25 percent. It has since dropped dramatically and briefly touched single digits late last year, before climbing again to above 12 percent.