ANKARA: Turkey’s central bank slightly raised its inflation forecast for the end of 2015 on Thursday and said it expected moderate economic growth in the second half along with an improvement in the current account deficit.
Announcing the bank’s quarterly inflation report, Governor Erdem Basci said the bank’s midpoint year-end inflation forecast now stood at 6.9 per cent, up from 6.8 per cent in its last report. It left its 2016 midpoint forecast at 5.5 per cent.
Basci said nobody should expect a premature loosening in Turkish monetary policy or an extreme tightening, signalling no sharp rate moves were immediately on the cards.
He forecast inflation would be below 7 per cent this month, but that keeping it there would require a joint effort by economic policymakers and not just the central bank. Inflation would keep falling until September and then fluctuate until the end of the year, he said.
Basci also hinted at possible moves to simplify monetary policy, which has at times been criticised by investors for being too complicated.
He said the bank was carrying out technical work to assess the impact of monetary policy based on a single interest rate and may review its policy framework if circumstances require. It may also review its reserve option mechanism, he said.
— Reuters
