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According to data of the Central Bank of Turkey for September, the basic consumer price index (CPI) rose by 24.5% in the first nine months of the year, compared to the same period last year. Compared with August of this year, the price increase was 6.3. Thus, year-on-year inflation reached a record level in Turkey over the past 15 years. Analysts polled by Bloomberg expected by the end of September a lower inflation rate - 21.1%.
Economists attribute acceleration of inflation in Turkey to the decline in the Lira, which has fallen by 40% against the Dollar since the beginning of the year.
Depreciation of the Turkish currency can be explained by several reasons. Back in the spring, the Lira began to renew the lows after the verbal intervention of President Recep Tayyip Erdogan, who said that if he won the early elections on June 24, he would be more active in regulating the country's economic and monetary policy. The Central Bank of Turkey earlier made it clear that in order to combat accelerating inflation - in April, prices rose by 10.85% compared to April last year - it intends to raise the basic discount rate, which many investors had expected until recently. However, Mr. Erdogan explained that he, on the contrary, intends to reduce the rate to revive lending and accelerate the economy. “I will take responsibility for taking the appropriate steps as the undisputed head of the executive branch,” the Turkish politician emphasized.
Later, the situation was aggravated by deterioration of relations between Turkey and the United States. In August, the US imposed sanctions after the arrest of American pastor Andrew Brunson, whom Ankara accuses of involvement in the attempted coup in 2016. The confrontation with the United States against the background of the depreciation of the Lira to the Dollar led to the fact that in early September, President Erdogan openly urged to abandon the Dollar. “Binding of international trade to the Dollar is gradually becoming a serious problem, it is necessary to end the dominance of the Dollar,” the Turkish president said at a business forum in Kyrgyzstan.
After the release of data on record-breaking inflation in Turkey, according to the results of September, the rate of the Turkish Lira dropped again on Wednesday - by 1%, to 6.05 per $ 1. According to statistical data, the prices of food products, which in Turkey constitute about a third of the basic consumer price index, rose in September (the first nine months of the year) by 27.7% compared with last year and by 7.2% against August. of the year. Rising prices for clothing in the first nine months of the year amounted to 17.1%, for energy carriers - 27%.
source: bloomberg.com
Economists attribute acceleration of inflation in Turkey to the decline in the Lira, which has fallen by 40% against the Dollar since the beginning of the year.
Depreciation of the Turkish currency can be explained by several reasons. Back in the spring, the Lira began to renew the lows after the verbal intervention of President Recep Tayyip Erdogan, who said that if he won the early elections on June 24, he would be more active in regulating the country's economic and monetary policy. The Central Bank of Turkey earlier made it clear that in order to combat accelerating inflation - in April, prices rose by 10.85% compared to April last year - it intends to raise the basic discount rate, which many investors had expected until recently. However, Mr. Erdogan explained that he, on the contrary, intends to reduce the rate to revive lending and accelerate the economy. “I will take responsibility for taking the appropriate steps as the undisputed head of the executive branch,” the Turkish politician emphasized.
Later, the situation was aggravated by deterioration of relations between Turkey and the United States. In August, the US imposed sanctions after the arrest of American pastor Andrew Brunson, whom Ankara accuses of involvement in the attempted coup in 2016. The confrontation with the United States against the background of the depreciation of the Lira to the Dollar led to the fact that in early September, President Erdogan openly urged to abandon the Dollar. “Binding of international trade to the Dollar is gradually becoming a serious problem, it is necessary to end the dominance of the Dollar,” the Turkish president said at a business forum in Kyrgyzstan.
After the release of data on record-breaking inflation in Turkey, according to the results of September, the rate of the Turkish Lira dropped again on Wednesday - by 1%, to 6.05 per $ 1. According to statistical data, the prices of food products, which in Turkey constitute about a third of the basic consumer price index, rose in September (the first nine months of the year) by 27.7% compared with last year and by 7.2% against August. of the year. Rising prices for clothing in the first nine months of the year amounted to 17.1%, for energy carriers - 27%.
source: bloomberg.com
