Turkish central bank sees price fall continuing
ISTANBUL (Reuters) – The Turkish Central Bank said yesterday it expects the falling trend in inflation to continue although food and energy prices remain a risk. In its report on monthly price developments, a day after August inflation data was released, the central bank also said the falling trend in services price inflation was expected to continue in September. The statistics office said on Monday that consumer price inflation was 0.02 percent month-on-month in August, as forecast, for an annual rate of 7.39 percent. The producer price index rose 0.85 percent in the month and 3.72 percent year-on-year. Analysts drew attention to the sharp rise in food prices, which were up 1.69 percent on the month due to a summer drought. «It is anticipated that the inflation trend will continue to be downwards in the coming period although the risks related to unprocessed food products and energy prices will retain their significance,» the statement said. Analysts said the central bank would want to see September inflation data before considering any interest rate cut. Last month the bank reiterated it could begin moderate rate cuts in the fourth quarter. The Islamic fasting month of Ramadan, which can have a significant upward impact on inflation, begins in mid-September. «It is envisaged that the falling trend in service price inflation will continue in September,» the central bank said.
