LONDON (Reuters) -Turkey will stick to its push to bring down inflation with the country’s finance minister pointing to temporary factors for a loss of momentum on the disinflation path, the president of the European Bank for Reconstruction and Development told Reuters.
Odile Renaud-Basso, just returned from the International Monetary Fund and World Bank annual meetings in Washington, DC, said she had discussed inflation pressures with Turkey’s Finance Minister Mehmet Simsek.
“He explained there is a bit of temporary factors, like the impact of drought … and specific factors that could have (an impact),” Renaud-Basso said on Monday.
“But I think the objective to decrease inflation will remain on track – these objectives are not going to change, they are going to keep the policy course.”
Turkey’s inflation rate in September came in higher than expected at 33.3%, marking the first annual rise since a peak of 75.4% in May last year. Monthly and annual readings were also higher than expected in August.
The country’s central bank is expected to trim the key interest rate by 100 basis points, according to a Reuters poll.
Turkey Central Bank Governor Fatih Karahan and his two deputies were also in Washington, meeting with investors over the past week. They told foreign investors that they were increasingly concerned about inflation – suggesting they were ready to slow down the pace of rate cuts, according to sources.
(Reporting by Karin Strohecker, Libby George and Simon Jessop; Editing by Emelia Sithole-Matarise)
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