Turkey’s central bank has raised its year-end inflation forecast for 2022 to 23.2 per cent from 11.8 per cent in its previous report.
At the meeting to present the bank’s first quarterly inflation report of the year, Turkey’s central bank governor Sahap Kavcioglu pointed to the increases in international food prices, as well as supply-side factors such as drought and disruptions in the supply chain that adversely affected the inflation outlook.
He stressed that supporting the lira is the key objective of Turkey’s current policy review.
The central bank’s policies will aim to encourage investors to convert their savings from foreign currencies into the Turkish lira, he added.
Turkey’s inflation hit 36.08 per cent year-on-year in December 2021, the highest since 2002.
The country has also been struggling against the sharp depreciation of the national currency in foreign exchange markets.
The central bank has kept the benchmark interest rate unchanged on January 20, halting an easing cycle that sparked a currency slump in the second half of 2021.
The Turkish lira lost nearly 44 per cent of its value in 2021 after the central bank slashed its policy rate by 500 basis points to 14 per cent from 19 per cent since September 2021 amid high inflation.