Turkish inflation seen above 30% in December amid lira weakness – Reuters Poll

Anil Panchal FXStreet

“Turkey's annual inflation rate is expected to have hit 30.6% in December, breaching the 30% level for the first time since 2003 as prices rose due to record lira volatility,” per the latest Reuters poll.

The survey details add, “The 30.6% median forecast of 13 economists would be the highest since May 2003 - with forecasts ranging from 26.4% to 37.3%.”

“The month-on-month rise in prices was seen at 9%, according to the median, with forecasts ranging from 5.5% to 14.6%,” also said Reuters poll.

Additional quotes

The recent lira slide was reversed late on Monday last week when Erdogan announced a scheme to protect lira deposits against currency volatility and state-backed market interventions triggered a 50% surge in the currency's value.

Inflation has been in double digits and well above emerging market peers for most of the last four years, eating into Turks' earnings and hitting support for Erdogan.

According to the Turk-Is trade union confederation, food prices rose 25.75% month-on-month in December. That represented an annual rise of 55%, up from 27% in November, marking the largest rise in food inflation since 1987.

The central bank's year-end inflation forecast was 18.4% in a report published in late October. The government predicted end-2021 annual inflation of 16.2%.

The Turkish Statistical Institute is scheduled to announce December inflation data at 0700 GMT on Jan. 3.

USD/TRY stays firmer

USD/TRY holds onto corrective pullback from six-week low marked on December 23, up 0.70% intraday around $11.92 during early Wednesday morning in Asia.

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Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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