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MNI INTERVIEW: CBRT Inflation Target May Go To 45% - Demiralp

(MNI) LONDON

Central Bank of Turkey increased its annual inflation target from 36% this week, and could do so again as it looks to support growth.

The Central Bank of Turkey may be targeting an annual inflation rate of 45% and 2% growth, a leading Turkish academic told MNI, but she added that whether it can do so remains in doubt with a recently-announced package of fiscal spend cuts unlikely to eat significantly into the pace of price growth and household inflation expectations sky high.

The CBRT held its policy rate at 50% in April, despite inflation increasing 0.9 percentage point from March to 69.8%, and used the publication last week of its Inflation Report to announce it had revised its year-end inflation target up 2 percentage points to 38%.

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The Central Bank of Turkey may be targeting an annual inflation rate of 45% and 2% growth, a leading Turkish academic told MNI, but she added that whether it can do so remains in doubt with a recently-announced package of fiscal spend cuts unlikely to eat significantly into the pace of price growth and household inflation expectations sky high.

The CBRT held its policy rate at 50% in April, despite inflation increasing 0.9 percentage point from March to 69.8%, and used the publication last week of its Inflation Report to announce it had revised its year-end inflation target up 2 percentage points to 38%.

Keep reading...Show less