ANKARA: The annual inflation rate in Turkey rose to nearly 25 percent in September, official statistics showed on Wednesday, as the Turkish lira remains weak against the US dollar despite a sharp interest rate hike last month.
Consumer prices accelerated to 24.52 percent in September from the same month last year, up from a 17.9 percent increase recorded in August, according to the Turkish statistics office (TUIK).
The figure was substantially higher than the Bloomberg consensus forecast of 21.1 percent.
The Turkish lira weakened to 6.0 against the US dollar, a loss of 1.5 percent on the day, after the data were released.
The lira has lost over 37 percent in value against the greenback since the beginning of the year.
Furnishings and household equipment saw the biggest gain, to 37.3 percent, TUIK said in a statement.
Prices for transport rose 36.61 percent while those for food and non-alcoholic drinks climbed by 27.7 percent.
The lira was hit hard by a diplomatic row between NATO allies Washington and Ankara over Turkey’s detention of an American pastor for two years on terror-related charges.
Amid continued concerns over domestic monetary policy and the government’s steering of the economy, the lira weakened dramatically after Washington imposed sanctions on two Turkish ministers and doubled steel and aluminium tariffs in August.
There was a brief reprieve last month when the bank increased its main policy rate — the one week repo auction rate — from 17.75 percent to 24 percent.
After the monetary policy committee stunned markets with the hike, the bank said a “tight stance in monetary policy will be maintained decisively until inflation outlook displays a significant improvement”.
However, President Recep Tayyip Erdogan has previously railed against interest rates, and said high rates cause high inflation.
He also once described interest rates as “the mother and father of all evil”.—AFP