ISTANBUL – Turkish inflation in June was well below market expectations, prompting analysts to predict the government’s IMF-backed target for year-end consumer inflation was within reach. But the central bank is not expected to quickly cut overnight interest rates and instead is seen as waiting for the International Monetary Fund to complete its latest review. The consumer price index (CPI) fell 0.13 percent in June compared with May to stand 8.93 percent higher than a year earlier, the State Statistics Institute (DIE) said on Saturday. A Reuters poll of 25 banks and brokerages had forecast a month-on-month increase of 0.29 percent. The wholesale price index (WPI) fell 1.05 percent month-on-month – wrong-footing analysts who had predicted a dip of only 0.03 percent – for an annual rise of 10.53 percent. «There is no reason at this time for us to miss our (year-end) target, it is a target we can comfortably reach,» Economy Minister Ali Babacan told reporters in Ankara. Turkey targets year-end CPI and WPI rates of 12 percent under its $19 billion loan pact with the IMF. «Following the June figures, we reiterate that the year-end official CPI target is within reach. It will even undershoot the official target,» said Ozgur Altug, economist at Raymond James. But the WPI target may be missed under increasing pressure from higher energy prices, he said. Turkey imports much of its energy needs, and international crude prices have risen sharply in recent months in part because of fears of Mideast violence. Inflation’s declining trend in Turkey could encourage the central bank to make an interest rate cut within the next month, but it is expected to remain cautious in the near term. «The figures indicate that the domestic inflation environment will enable the central bank to cut overnight interest rates by 200 basis points,» Altug said. Analysts saw the bank waiting until the IMF completes its review of Turkey’s loan accord. The review is expected to be finalized in the first week of August. The bank last cut its headline rates by two percentage points in mid-March. The overnight lending rate is 27 percent, while the borrowing rate is 22 percent. DIE also said core inflation, defined as private sector manufacturing prices, an important indicator for future price rises, rose 1.2 percent in June, slightly below market expectations of 1.17 percent. «This confirms there was a slowdown in the price increases in the private manufacturing sector,» Altug said.