Turkish annual inflation stayed just below 20 per cent in March, according to data posted by the country’s statistics institute today as wrangling over local elections continues.
The inflation rate increased very slightly from February but was well below the highs seen towards the end of 2018, when a currency crisis pushed it to above 25 per cent.
The Turkish Statistical Institute said that the country’s consumer price index (CPI) rate of annual inflation stood at 19.71 per cent in March.
The country’s benchmark BIST 100 stock index had risen 0.9 per cent shortly after midday UK time.
Between March and October 2018 Turkey’s annual inflation rate increased by 15 percentage points as an economic clash with the US saw the lira plummet in value, pushing up costs.
High inflation caused Turkey’s central bank to ramp up interest rates towards the end of the year, and the country stumbled into recession.
Turkey fought local elections on Sunday that look to have unseated President Recep Tayyip Erdogan’s Justice and Development Party (AKP) in Ankara, the capital, possibly in response to recent chaos in the economy.
Turkey’s High Election Board announced today that it will recount votes in Istanbul after appeals from the AKP.
Erdogan’s latest headache comes after a key interest rate for short-term lira borrowing hit 400 per cent yesterday, after closing at 23.75 per cent on Friday.
The lira overnight swap rate – the cost to investors of borrowing lira using foreign currency overnight – hit 1,200 per cent last week, by far its highest mark in history. Bankers believed the Turkish government was attempting to avert a lira crisis ahead of the elections by leaning on local banks to push up rates.