Turkey’s Central Bank on Thursday kept the country’s year-end inflation forecasts unchanged at 9.4% for this year and 7% for next year.
The inflation rate will fluctuate between 7.3% and 11.5% through the end of the year, the bank’s governor told a virtual meeting to release the bank’s first quarterly inflation report for 2021.
Underlining that inflation is projected to stabilize around 5% by 2023, Naci Agbal said a tight monetary stance will be resolutely maintained until the target is reached.
“The Monetary Policy Committee will continue to use all instruments to reach the 5% target,” Agbal said.
A full-fledged inflation targeting regime will be decisively implemented within a simple operational framework, Agbal noted.
He stressed that additional front-loaded tightening will be implemented in case of any risks of deviation from the medium-term target path in inflation expectations and pricing behavior.
The bank raised its food inflation forecast to 11.5% for 2021, up 1 percentage point from the previous report, Agbal said.
The bank also hiked its oil price forecast for 2021 to $54.4 per barrel from $43.8. The forecast for 2022 is $52.2.
The appointment of Agbal last November was welcomed by markets and investors, praising a move to orthodox management of inflation and the value of the Turkish lira currency.
