ANKARA (dpa-AFX) - Turkey's central bank on Thursday left its inflation forecast for the year unchanged and hinted at more rate cuts.
In the latest Inflation Report, released today, the bank left the year-end inflation forecast for this year at 7.6 percent. The bank has an inflation target of 5 percent, which Governor Erdem Basci said could be achieved by the end of next year.
'Due to high food prices and the lagged effects of exchange rate depreciation, annual inflation is expected to considerably exceed the 5-percent target at the year-end,' the bank said in the report.
'Tight monetary policy stance will be maintained, by keeping a flat yield curve, until there is a significant improvement in the inflation outlook and the improvement in the global liquidity conditions is sustained,' it added.
Last week, the central bank trimmed its benchmark interest rate for the third straight month on rising pressure from the government for looser monetary policy. The one-week repo rate was cut to 8.25 percent.
The bank has reduced the rate by 50 basis points in May and by another 75 basis points in June after raising it by a massive 550 basis points in January.
Speaking at a press conference on the sidelines of the publication of the report, Basci reportedly said further reduction in the interest rates would be 'measured' cuts. He also noted that financial markets were pricing in a reduction of 50 basis points over the next three months.
Copyright RTT News/dpa-AFX