Rising food prices pushing inflation up, says Turkish Central Bank

Turkey's Central Bank says inflation will stay high in the coming period due to hike in food prices.

Rising food prices pushing inflation up, says Turkish Central Bank

World Bulletin / News Desk

Turkey's increased food prices, together with the depreciation in the lira currency, will cause its inflation to remain high in the coming period, the country's Central Bank said on Wednesday.

"Annual food group inflation increased slightly to 10.12 percent. In the first quarter, fruit and vegetable prices were moderate, while food prices excluding this group were substantially unfavorable," the bank said in a statement on its website.

The bank said adverse weather conditions and droughts across the country caused the sharp rise in food prices.

"Owing to these effects, the annual food price inflation is expected to rise further in April," the statement said.

It also said that loan growth continued to slow down in response to the bank's tight monetary policies and macro-prudential measures.

"The slowdown in loan growth is mostly attributed to consumer loans and credit cards, while commercial loans expand at a rate similar to past years. This positive development in loan growth composition is expected to contribute to financial stability, the rebalancing process and the decrease in inflation," the bank said.

Consumer prices increased by 1.13 percent in March, pushing annual inflation up to 8.39 percent. However, the Central Bank did not opt to raise its main interest rates in April, keeping borrowing rate at 8 percent, marginal funding rate at 12 percent and one-week repo rate at 10 percent.

"Strengthening structural reforms that will ensure the sustainability of the fiscal discipline and reduce the savings deficit will support macroeconomic stability in the medium term," the bank said.

Last Mod: 01 Mayıs 2014, 09:34
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