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MNI INTERVIEW: Conditions Right For CBRT Cut -Ex-Deputy Turhan

Former central bank staffer assesses Turkish monetary policy and economic outlook.

MNI (LONDON) - Stubborn services inflation should not stop the Central Bank of the Republic of Turkey from beginning to cut interest rates, a former deputy governor told MNI, saying that risks from over-tight policy were growing as record-high interest rates transmit more quickly to the real economy.

Levels of service sector price rigidity are “normal”, and comparable with those in the U.S. and Europe, said Ibrahim Turhan, deputy governor from 2008-2012 and currently founder and chairman at consultancy iQuanta. Seasonally-adjusted goods inflation of 1.2% in September was already low enough for the CBRT “to have easily cut in November if it wanted to,” Turhan said in an interview.

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MNI (LONDON) - Stubborn services inflation should not stop the Central Bank of the Republic of Turkey from beginning to cut interest rates, a former deputy governor told MNI, saying that risks from over-tight policy were growing as record-high interest rates transmit more quickly to the real economy.

Levels of service sector price rigidity are “normal”, and comparable with those in the U.S. and Europe, said Ibrahim Turhan, deputy governor from 2008-2012 and currently founder and chairman at consultancy iQuanta. Seasonally-adjusted goods inflation of 1.2% in September was already low enough for the CBRT “to have easily cut in November if it wanted to,” Turhan said in an interview.

Keep reading...Show less