Turkey August, core CPI rises 33% y/y: est, +33.05%

Turkey August, core CPI rises 33% y/y: est, +33.05%

ISTANBUL (Reuters) - Turkey's core consumer price index (CPI) is expected to rise by 33.05% year-on-year in August, according to a Reuters poll. The median estimate of ten economists shows a monthly inflation rate of 1.79% in August, down from 2.06% in July [1].

The year-on-year inflation forecasts ranged between 32.2% and 33.2%, a decrease from the July estimate of 33.52%. The Turkish Statistical Institute will release the August inflation data at 0700 GMT on September 3.

Market volatility in Turkey eased after the central bank raised rates, tightened liquidity, and sold $57 billion in foreign currency in March. The central bank also took steps to tighten policy by 700 basis points. In July, the central bank cut the policy rate by 300 basis points, relaunching the easing cycle, and said that leading indicators suggest a continued gradual slowdown in the main trend of inflation in August [1].

HSBC analysts expect the central bank to deliver three 250-point rate cuts in the rest of this year, taking the policy rate from 43.0% currently to 35.5% by December. If the August CPI print points to further disinflation gains, this might lead to a larger rate cut on the September meeting [1].

Inflation is seen dropping to 30% by year-end, according to the poll median, higher than the central bank target of 24% and its forecast range of 25-29%. In the poll conducted a month ago, the median of the year-end forecasts stood at 29.75% [1].

References:
[1] https://www.investing.com/news/economy-news/turkey-annual-inflation-seen-at-326-in-aug-monthly-rate-18-reuters-poll-4216115