Turkey inflation dips to 35% in June, a bit below forecast
Food and drinks inflation dipped by 0.27% from the previous month, the Turkish Statistical Institute said, helping to keep overall disinflation on track.
Annual inflation has fallen from a peak of 75% in May of last year, paving the way for monetary easing that began in December but was reversed in April.
In a Reuters poll, annual consumer price inflation was expected to be 35.2% while the monthly rate was seen at 1.45% in June.
In May, inflation also came in lower than expected at 35.41% annually and 1.53% monthly, setting expectations that the central bank would return to interest rate cuts later this summer.
In March, Turkish assets came under pressure, with the lira hitting a record low against the U.S. dollar after Istanbul Mayor Ekrem Imamoglu — President Tayyip Erdogan's main political rival — was jailed pending trial on graft charges that he denies.
A rate hike in April offset the market volatility. The central bank also responded by selling some $57 billion in foreign currency and took steps to tighten policy by 700 basis points.
Last month, the bank kept interest rates steady at 46% and promised to maintain tight policy until a sustained decline in inflation is achieved. It had also said the decline in the underlying trend of inflation continued in June.
The lira held steady at 39.885 to the dollar after the data.
The domestic producer price index rose 2.46% month-on-month in June for an annual rise of 24.45%, the data also showed.
(Reporting by Jonathan Spicer and Canan Sevgili)
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