(Bloomberg) -- Turkey's inflation jumped to a fresh 20-year high in February, driven by a weak lira and a surge in energy and food prices.
Consumer prices rose an annual 54.4% through last month, up from 48.7% in January. The median estimate in a Bloomberg survey of 22 analysts predicted an acceleration to 52.5%.
Monthly inflation was 4.8%, compared with the median estimate of 3.75% in a separate survey.
Below are the highlights of the inflation report published by Turkstat on Thursday:
- Producer prices rose 7.2% through the month, bringing annual inflation to 105%
- The rate of inflation in energy stood at 83% from 76.4% in January, led by gasoline and power costs. Turkey has recently cut taxes on household power consumption but the impact will only be seen from March
- Annual price gains in food, which makes up roughly a quarter of the consumer basket, accelerated to 64.5% from 55.6%, even after the government cut taxes on food
- A core inflation index, which strips out the impact from volatile items such as food, energy and gold, rose to 44.1% from 39.5% in January
Markets
- The lira was trading 0.7% lower at 14.1268 per dollar as of 10:05 a.m. in Istanbul
Background
- The acceleration takes Turkey's benchmark interest rate adjusted for inflation to around negative 40%, the lowest real yield by far among emerging markets
- Retail price inflation in Istanbul, Turkey's commercial capital, climbed to 55.3% last month from 50.9% in January
- The central bank will hold its next rate-setting meeting on March 17
- Turkey's central bank held rates for a second month in February after it slashed 500 basis points in late 2021. The cuts sent the lira into a tailspin that's accelerated consumer price rises. Although lira sustained stability earlier, the local currency lost around 5.8% of its value against the dollar this year with investors avoiding riskier assets amid a slew of sanctions imposed on Russia over its war on Ukraine
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