Turkey to publish annual inflation rate

The Central Bank of Turkey (TCMB) will release its inflation rate decision today. The rate, which currently stands at 15.5%,

Photo: AP/ Emrah Gurel

The Central Bank of Turkey (TCMB) will release its inflation rate decision today.

The rate, which currently stands at 15.5%, will likely be adjusted upwards. After strengthening at the beginning of the year, the Turkish lira has once more depreciated against the US dollar due to the reduction of foreign currency reserves combined with a staggering account deficit. The devaluation, which commenced in mid-February, has increasingly alarmed foreign investors, and President Recep Tayyip Erdogan’s recent signals concerning former finance minister Berat Albayrak’s possible return to government has marred reliance on Turkey’s financial policies.

Expect TCMB Governor Naci Agbal to maintain a hawkish monetary policy with an eye on likely rising future inflation rates. Apart from easing nationwide COVID-19 restrictions to reopen small businesses and keep the economy churning, the ruling Justice and Development Party (AKP) will also implement new policies aimed at rapid GDP growth. Although a 1.8% GDP appreciation in 2020 relieved spectators to an extent, Ankara is rolling up its sleeves to boost nominal wages during the short- to medium-term, hoping to quell employee turnover, improve worker productivity and sway consumers to spend more.

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