ISTANBUL: Turkiye’s inflation probably surged to almost 70% in March, as the lira weakened on concerns that Sunday’s local elections could have prompted a currency rout.
Analysts expected data to show prices accelerated to 69% on an annual basis last month, up from 67.1% in February, according to a survey conducted by Bloomberg.
Monthly inflation – the main gauge that policymakers use – likely slowed to 3.5% from 4.5%, according to a separate poll, still higher than in the preceding quarter.
Turkiye nationals increased their holdings of hard currency on concerns the lira would face a sharp depreciation after the March 31 municipal vote, which resulted in an unprecedented defeat for President Recep Tayyip Erdogan.
After last May’s presidential elections, the lira dropped as much as 7% in a single day and the worry was a repeat of a similar slump.
The currency was the worst performer across emerging market currencies last month, with a loss of 3.2% against the US dollar.
Turkiye is prone to policy swings after elections. However, Erdogan has this time ruled out concerns of a step back from orthodox measures and reiterated support for his economic team despite his defeat.
That most likely signals a continuation of higher borrowing costs and tighter financial policies to tame inflation. — Bloomberg
