Turkey’s central bank hikes inflation forecast to 12.2 percent

In its quarterly inflation report, the central bank raised the inflation forecast from 9.4 percent.

Turkey’s central bank responded to a lira slide by raising its year-end inflation forecast on Thursday to 12.2 percent from 9.4 percent, and its new governor said tight policy would be maintained until price pressures decline. Presenting a quarterly inflation report for the first time since he was appointed last month, Governor Sahap Kavcioglu said the policy rate, now at 19 percent, would be set above inflation, which topped 16 percent last month and is expected to rise more. Kavcioglu sought in the presentation to convince economists that he would be as decisive as his predecessor, Naci Agbal, a respected policy hawk, in bringing down inflation to a 5 percent target over the next three years.