Dow Jones – Turkey's annual inflation rate jumped to a nine-year high in October, the state statistics agency said on Friday, fuelled by soaring core prices. This comes after a warning from the country's central bank earlier this week of a potential rise in inflation.
The annual consumer-price index rose to 11.9% in October--the highest reading since October 2008--from 11.2% in September, according to the official data. This exceeded a forecast of 11.6% in a survey by The Wall Street Journal, and more than doubled the central bank's target of 5%.
Core inflation indicators, excluding food and beverages, tobacco, energy and gold prices, jumped to 11.8% in October from 11% in September, rising at the fastest pace in more than 13 years.
Turkish lira weakened more than 1.5% against the dollar to trade at TRY3.8522 in the afternoon. Meanwhile, Turkey's BIST-100 index was down 1.6%.
"Inflation in Turkey continues to push relentlessly higher," Cristian Maggio, head of emerging markets strategy at TD Securities, said. "The current situation leads us to a very simple and inevitable conclusion, monetary policy is not tight enough."
The governor of Turkey's central bank, Murat Cetinkaya, said on Wednesday that the bank had raised the year-end inflation forecast to 9.8% from 8.7%. Policymakers lifted their inflation estimate for next year to 7% from 6.4%, citing the recent depreciation of the Turkish currency.