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Turkish inflation cools to 12M low in June

Mubasher: Turkey’s inflation rate cooled in June, recording the fastest pace since last October, when the economy was reeling from a currency crisis.

Turkish consumer price inflation eased to an annual 15.7% last June, from 18.7% in May, Turkish Statistical Institute (Turkstat) said on Wednesday.

This marked the lowest reading since a year ago, while it came just below the 15.9% rate which the government targets by the end of this year.

The prices of food and non-alcoholic beverages fell by 1.65%, while they slid by 1.57% for clothing and footwear.

In addition, consumer prices in Turkey increased by a slight 0.03% month-on-month in June.

Turkish Treasury and Finance Minister Berat Albayrak expected last month that inflation may slow to a single-digit rate by the autumn.

However, market volatility fuelled by political tensions with the US over Ankara’s purchase of Russian S-400 missile systems could send the Turkish lira (TRY) to plunge and thus impact prices.

The steep fall in Turkey’s inflation rate could now compel the Central Bank of the Republic of Turkey (CBRT) to reduce interest rates.

By 1:17 pm GMT, the lira climbed against the US dollar, with the USD/TRY pair falling by 0.30% to TRY 5.6405.

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