Turkey’s central bank reduced its estimate for inflation this year to 6.2 percent from 6.5 percent, saying the rate may be lower than the forecast and is expected to dip in the fourth quarter.
The central bank also cut its estimate for inflation in 2013 to 5.1 percent from 5.2 percent, governor Erdem Basci said at a news conference in Ankara today to announce the bank’s quarterly assessment of inflation.
The rate of price increases may accelerate in July, though inflation isn’t expected to reach double figures, Basci said. The rate will stabilize at 5 percent in the medium term, he said.
Basci is tightening monetary policy by lending at rates between his benchmark of 5.75 percent and an upper limit of 11.5 percent on a daily basis to help tame inflation and maintain economic growth. Inflation was 8.9 percent in June compared with 8.3 percent in May and 11.1 percent in April, a three-year high.
The central bank’s measure of core inflation will continue declining, Basci said.
The lira fell less than 0.1 percent to 1.8226 per dollar at 10:43 a.m. in Istanbul. Yields on two-year government bonds declined one basis point, or 0.01 percentage point, to 7.88 percent.