Turkey: Lira under pressure

The Turkish lira was the weakest among European emerging market currencies against the dollar yesterday, as inflation rose to the highest rate since last October. The currency declined as much as 1 percent and traded 0.4 percent lower at 2.2643 to the dollar at 12:40pm in Istanbul.

January inflation accelerated to 7.48 percent, exceeding the 7.43 percent average estimate of 12 economists surveyed, as food prices rose more than 10 percent. The producer price inflation rate climbed to 10.72 percent and core inflation accelerated to 7.59 percent.

The central bank raised its one-week repurchase rate to 10 percent last week from 4.5 percent, saying tight monetary policy would be sustained until there was a “significant” improvement in the inflation outlook. – Bloomberg