Investors are concerned about attempts by Turkish President Recep Tayyip Erdogan to influence monetary policy

Turkish central bank raises year-end inflation forecast to 14%

photo_camera PHOTO/ Banco Central de Turquía vía REUTERS - Turkish Central Bank Governor Sahap Kavcioglu sits in his office in Ankara, Turkey

Turkey's Central Bank (TCMB) on Thursday raised its inflation forecast for this year from 12.2% to 14.1% and said it will keep interest rates above the inflation rate for the time being.

"We want to continue with a tight monetary policy to reduce inflation," TCMB governor Sahap Kavcioglu told the official Anadolu news agency.


Turkey's year-on-year inflation reached 17.53% in June, the highest level in two years.

Kavcioglu remarked that interest rates, which have been at 19% since March, "will continue to remain above inflation".

The head of the central bank also expects inflation to fall sharply in the coming year, to 7.8% by the end of 2022 and 5% by the end of 2023.


The rise in prices coincides with the weakening of the Turkish lira, caused in part by investor concerns about attempts to influence monetary policy by Turkish President Recep Tayyip Erdogan, who has sacked four Central Bank governors in less than two years.

So far in 2021, the Turkish lira has depreciated by 10.7% against the euro and 12.7% against the dollar.