Inflation Report: Nothing Surprising

TURKEY - In Brief 31 Oct 2013 by Murat Ucer

As we were tied up at the economic congress in Izmir (apologies!), we couldn't hear Governor Basci speak today, but there is little surprising in what we read and heard so far.  Inflation yearend estimate (midpoint) is now 6.8%, which we knew from the MTP already, while Governor Basci has apparently been perceived by market analysts as relatively more hawkish.  But the latter does not surprise us, either. After all, he is the CB Governor of a country in which all inflation indicators including core, hovering 3 pp above target. More importantly, we remain very doubtful words would ever translate to action unless lira comes under significant and renewed pressure.  We shall follow this up with a more detailed take over the weekend.

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