According to the data released by the Turkish Statistics Institute, Turkish consumer prices fell 0.41 percent month-on-month in July, larger than the forecast drop of 0.07 percent. The index rose 6.31 percent year-on-year. Producer prices fell 0.03 percent on the month, compared with a forecast rise of 0.80 percent. Central Bank Governor Erdem Başçı said further lira depreciation could push up prices, but the bank held its 2011 and 2012 inflation forecasts steady.
All eyes will be on tomorrow’s report from the extraordinary meeting of the Monetary Policy Committee (Item 1 above). Because it is extraordinary and clearly pre-emptive, it is reasonable to expect Committee action that has policy consequences and is intended to minimize negative spill-over effects for the Turkish economy.
Source: Today’s Zaman
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