Turkey’s central bank raises year-end inflation forecast to 8.7 percent

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ANKARA, TURKEY - AUGUST 01: Governor of Central Bank of the Republic of Turkey (CBRT), Murat Cetinkaya delivers a speech during the Inflation Report Briefing at Hilton Hotel in Ankara, Turkey on August 01, 2017. AFP

Turkish Central Bank Governor Murat Çetinkaya on Tuesday raised the inflation forecast for end-2017 to 8.7 percent from the previous 8.5 percent.

Speaking during a press conference in Ankara on Tuesday, Çetinkaya said the increase in the forecast was due to double-digit increases in food prices.

Çetinkaya said the current levels of inflation pose risks to pricing behavior and that a tight monetary policy will be maintained until the inflation outlook displays significant improvement, Reuters reported.

He also said the bank would continue to use all available instruments in pursuit of its goal of price stability.

According to Çetinkaya, the inflation would stabilize at around 5 percent in the medium term before falling to 6.4 percent in 2018.

The central bank also cut its oil price assumption to $50 per barrel from $55 as it released its quarterly inflation forecast, a Hürriyet Daily News report said.

Domestic demand conditions have improved and demand from the European Union economies continues to contribute positively to exports,” he added.

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