January 31, 2020 / 2:26 PM / 18 days ago

Turkish cenbank missed target but says inflation sliding

ANKARA, Jan 31 (Reuters) - Turkey’s downward inflation trend is largely in line with its 2020 projection, the central bank said on Friday in an open letter to the government explaining how it missed the price target last year.

“It is expected that financial conditions would support domestic demand and economic activity, but aggregate demand conditions would not be inflationary,” said the bank, which is required to explain when inflation misses a 5% target range.

Year-over-year inflation was 11.8% in December after a dramatic slide from above 25% during a currency crisis in 2018. The central bank expects it to fall to around 8.2% by year end.

Maintaining a sustained disinflation process is vital to lowering Turkey’s risk profile, bringing down longer-term rates and strengthening the economy, it added. (Reporting by Ece Toksabay; Editing by Jonathan Spicer)

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