Annual Inflation At 7.24, Cen Bank Drops Early Rate Cut Meeting (2)

ISTANBUL, February 3 (DHA) - Turkey's consumer price index rose by 1.1 percent in January, pulling the annual inflation to 7.24 percent, from 8.17 percent in the same period of last year, according to the data relased by Turkstat, on Tuesday.

Central Bank of Turkey Governor Erdem Başçı said on January 27 that if January inflation would fall more than a percentage point, the bank could hold an extraordinary meeting as early as next week to discuss cutting rates.

The Monetary Policy Committee would meet and make a decision, depending on the “strength of disinflation we will decide whether to call a meeting or not” Basci told reporters on the sidelines of a conference in Budapest on Monday.

Another statement came from the Central Bank, immediately after the inflation data was released, saying that, "Inflation indicators continue to improve in recent months owing to the implementation of cautious monetary and liquidity policies. The Monetary Policy Committee will assess the inflation outlook in detail at the regular meeting which will be held on the 24th of February."

Market reaction

Dollar fell to below 2.43 lira, immediately after the data was released, from it was over 2.44 lira in early trade. The loss of the dollar against lira rose after the Central Bank's statement was released and dollar fell to 2.4143 lira. Euro fell to 7.73 level after the Central Bank statement was released, from over 2.76 lira it was at before the data.

Monthly developments at consumer prices

Food and non-alcoholic beverages prices rose by 3.52 percent in January, followed by miscellaneous goods and services with 2.52 percent, furnishings and household equipment with 2.01 percent and recreation and culture with 1.64 percent.

The highest monthly price decrease was at clothing and footwear by 6.98 percent, followed by transportation prices with 0.56 percent, in January.

Annual developments at consumer prices

The highest annual price increase was at hotels, cafes and restaurants with 13.06 percent, followed by food and non-alcoholic beverages with 10.97 percent, miscellaneous goods and services with 9.77 percent, clothing and footwear with 9.14 percent, furnishings and household equipment with 8.54 percent.

In January 2015 within average prices of 426 items in the index, average prices of 37 items remained unchanged while average prices of 283 items increased and average prices of 106 items decreased.

Domestic producer prices developments

Domestic producer price index (D-PPI) increased by 0.33 percent on monthly basis and 3.28 percent on annual basis. D-PPI rise on the twelve months moving averages basis was by 9.59 percent.

D-PPI monthly decreased by 1.27 percent in the index for mining and stone quarrying, increased by 0.19 percent in the index for manufacturing, increased by 0.95 percent in the index for electricity and gas and increased by 11.31 percent for water supply.

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