Official data showed today that annual consumer price inflation in Türkiye fell to 47.09% last November, and also declined from a monthly basis of 2.24%.
The annual consumer price inflation rate was 48.58% in October, while the monthly rate was 2.88%.
Turkish Statistical Institute data showed that the domestic producer price index rose 0.66% on a monthly basis in November and 29.47% on an annual basis.
Interest
The decline in inflation in recent months paves the way for Turkish Central Bank Governor Fatih Karahan to begin cutting the 50% interest rate now, as the Monetary Policy Committee indicated last month that improving inflation expectations may soon justify lowering interest rates.
Bloomberg quoted the head of treasury at MUFG Bank Turkey, Onur Ilgen, as saying that while the data came slightly higher than expectations, it would not hinder the potential start of the interest rate reduction cycle given the improvement in fundamental indicators.
“We maintain our expectations for interest rate cuts this month,” he said.
According to Bloomberg, the decline in borrowing costs in Turkey would provide a much-needed boost to the largest non-oil economy in the Middle East, after it entered a technical recession (two consecutive quarters of contraction) in the third quarter of this year due to the central bank’s stance on monetary policy.
