Turkish Inflation Drops Slightly for First Time in 3 Months

Pedestrians walk past a currency exchange shop in the Turkish city of Istanbul. (EPA)
Pedestrians walk past a currency exchange shop in the Turkish city of Istanbul. (EPA)
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Turkish Inflation Drops Slightly for First Time in 3 Months

Pedestrians walk past a currency exchange shop in the Turkish city of Istanbul. (EPA)
Pedestrians walk past a currency exchange shop in the Turkish city of Istanbul. (EPA)

Turkish annual consumer price inflation dropped for the first time in three months to 61.36% in October, data from the Turkish Statistical Institute showed on Friday, as fallout eased from the lira's sharp summer decline, and tax hikes.

Month-on-month, inflation was 3.43%.

The domestic producer price index was up 1.94% month-on-month in October for an annual rise of 39.39%.

The annual inflation rate increased to 61.53% in September and is expected to rise into next year although the central bank raised the interest rate by 2,650 basis points to 35 percent.

Türkiye’s central bank (CBRT) raised its year-end inflation forecasts for this year and next to 65% and 36% respectively, Governor Hafize Gaye Erkan said on Thursday.

The bank's previous inflation report three months ago forecast year-end inflation of 58% in 2023 and 33% next year.

Moreover, the 2025 inflation forecast was lowered from 15 percent to 14 percent.

Erkan told a press conference to present the CBRT's inflation report that disinflation would start after it peaked at around 70%-75% in May.

“We expect that there will be temporary rises in the monthly inflation in November, January, and May owing to several factors that fall outside the scope of the monetary policy,” according to Erkan.

"We will continue to use all our tools decisively until there is a significant improvement in the inflation outlook.”

She added that the bank maintained a 5% medium-term target.

Türkiye will move to inflation-adjusted accounting, but financial institutions may be excluded from the practice, Finance Minister Mehmet Simsek said.



Oil Prices Ease but Remain Near 2-week Highs on Russia, Iran Tensions

FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford//File Photo
FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford//File Photo
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Oil Prices Ease but Remain Near 2-week Highs on Russia, Iran Tensions

FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford//File Photo
FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford//File Photo

Oil prices retreated on Monday following 6% gains last week, but remained near two-week highs as geopolitical tensions grew between Western powers and major oil producers Russia and Iran, raising risks of supply disruption.
Brent crude futures slipped 26 cents, or 0.35%, to $74.91 a barrel by 0440 GMT, while US West Texas Intermediate crude futures were at $70.97 a barrel, down 27 cents, or 0.38%.
Both contracts last week notched their biggest weekly gains since late September to reach their highest settlement levels since Nov. 7 after Russia fired a hypersonic missile at Ukraine in a warning to the United States and UK following strikes by Kyiv on Russia using US and British weapons.
"Oil prices are starting the new week with some slight cool-off as market participants await more cues from geopolitical developments and the Fed’s policy outlook to set the tone," said Yeap Jun Rong, market strategist at IG.
"Tensions between Ukraine and Russia have edged up a notch lately, leading to some pricing for the risks of a wider escalation potentially impacting oil supplies."
As both Ukraine and Russia vie to gain some leverage ahead of any upcoming negotiations under a Trump administration, the tensions may likely persist into the year-end, keeping Brent prices supported around $70-$80, Yeap added.
In addition, Iran reacted to a resolution passed by the UN nuclear watchdog on Thursday by ordering measures such as activating various new and advanced centrifuges used in enriching uranium.
"The IAEA censure and Iran’s response heightens the likelihood that Trump will look to enforce sanctions against Iran’s oil exports when he comes into power," Vivek Dhar, a commodities strategist at Commonwealth Bank of Australia said in a note.
Enforced sanctions could sideline about 1 million barrels per day of Iran’s oil exports, about 1% of global oil supply, he said.
The Iranian foreign ministry said on Sunday that it will hold talks about its disputed nuclear program with three European powers on Nov. 29.
"Markets are concerned not only about damage to oil ports and infrastructure, but also the possibility of war contagion and involvement of more countries," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Investors were also focused on rising crude oil demand at China and India, the world's top and third-largest importers, respectively.
China's crude imports rebounded in November as lower prices drew stockpiling demand while Indian refiners increased crude throughput by 3% on year to 5.04 million bpd in October, buoyed by fuel exports.
For the week, traders will be eyeing US personal consumption expenditures (PCE) data, due on Wednesday, as that will likely inform the Federal Reserve’s policy meeting scheduled for Dec. 17-18, Sachdeva said.