Turkish inflation continues to jump in light of the lira’s decline

At a time when Turkey’s inflation has fallen against the lira against foreign currencies, it has continued to strike hard in light of President Recep Tayyip Erdogan’s insistence on lowering interest rates.
And the Turkish Bureau of Statistics said in a statement yesterday (Friday) that inflation, which stood at 19.98% in October, had risen to an all-time high of 21.31% year-on-year in November, the highest level ever. 3 years later, it recorded a 24% increase in 2018, exacerbating the decline in real income after the unprecedented fall of the lira. Also, the Turkish lira traded at 13.78 lira against the dollar yesterday.
According to a Reuters poll, the company said consumer prices rose 3.51% on a monthly basis and had annual reading expectations of 20.7% higher than the previous 3% forecast. Data shows that the Manufacturer Price Index rose 9.99% in November, registering an annual increase of 54.62%.
At the same time, Fitch International, an international credit rating agency, revised Turkey’s outlook to “negative” and confirmed its rating as “PP-negative” and reduced its outlook on Turkey’s long-term debt default to “negative” instead of “negative”. Negative. “Fixed”.
Fitch said in a statement that Turkey’s adjustment of vision reflects the central bank’s deflationary policy ahead of its time, with its assessment reflecting weak monetary policy credibility, high inflation, lack of external liquidity and geopolitical risks. The company expects inflation in Turkey to rise to 25% by the end of this year.
Turkey continues to experience severe turmoil in the exchange markets as it continues to relax the central bank’s monetary policy. At dawn yesterday, Turkish President Recep Tayyip Erdogan removed Lutfi Elvan, the Treasury and Finance Minister who was the last opponent of his interest rate cut policy, from the dispute over whether to conduct monetary policy in light of recent inflation. Surface. Erdogan has been replaced by Elvan, one of the four deputy ministers and a former Member of Parliament for the ruling Justice and Development Party.
Erdogan has fired three central bankers since June 2019 for opposing his intention to cut key interest rates.