Turkey central Bank hikes year-end inflation forecast to 23.5%

Istanbul: Turkey's central bank on Wednesday sharply raised its inflation forecast for this year and next year, highlighting the continuing impact of a lira sell-off that has shaken confidence in the economy.
The bank raised its 2018 inflation forecast to 23.5 per cent from 13.4 per cent, governor Murat Cetinkaya said on Wednesday, at a presentation of the bank's quarterly inflation report. It raised the 2019 forecast to 15.2 per cent from the 9.3 per cent announced in the previous report in July.
He said the central bank will continue to use all available instruments to steer inflation lower and further monetary tightening would be delivered if needed.
The lira has fallen by around a third against the dollar this year, driving up the cost of food and fuel and deepening investor concern about the eventual impact on the real economy and on the banking sector.
The central bank, which has come under pressure from President Tayyip Erdogan to lower borrowing costs, this month kept rates on hold at 24 per cent, an expected move following its mammoth hike in September that has helped the lira recoup some losses.
But with inflation at 24.52 per cent last month, the central bank has effectively left Turkey without real interest rates, economists say - the rate once inflation is taken into account.
The bank also raised its 2020 year-end inflation forecast to 9.5 per cent from 6.7 per cent in its previous inflation report.