Eyes turn to Central Bank after September inflation release

Eyes are now on the Central Bank after inflation in September came in above expectations, while Governor Fatih Karahan has reiterated that the bank will maintain its tight stance.

Last month, consumer prices rose 2.97 percent, accelerating from 2.47 percent in August. The September print was also above the market forecast of 2.2 percent.

The annual inflation rate declined to the 14-month low of 49.34 percent, which was, however, also higher than analysts' forecast of 48.3 percent.

The higher-than-expected inflation led analysts to revise their expectations for a rate cut.

Before the release of the September inflation numbers, some economists had forecast that the bank would start reducing the main policy rate by the end of the year, with some even predicting a cut as early as November.

"The smaller-than-expected decline in Türkiye's headline rate in September will be a disappointment to policymakers at the Central Bank," Nicholas Farr, emerging Europe economist at the London-based Capital Economics, said in a note to clients.

He said the figure showed that a monetary easing cycle was unlikely to start until 2025.

The central bank's policy rate at 50 percent is now higher than the annual inflation rate for the first time since 2021.

Speaking at parliament's planning and budget commission on Oct. 3, Karahan reiterated that the bank would maintain its tight stance decisively until price stability is achieved.

He told lawmakers that there are two main criteria for them: A significant and permanent decrease in the main trend of monthly inflation and the convergence of expectations to the bank's forecast range.

"We assess that there is still some distance to be covered in both criteria. Therefore, we...