Turkish inflation on the agenda again

Turkey's consumer price index (CPI) recorded an increase of 1.88 percent and producer price index (PPI) 2.77 percent last month due to the cost inflation grew out of depreciation of TRY in May. In the first five months of the year, CPI rose 4.53 percent while PPI increased 7.36 percent. Year-on-year CPI rose to 8.21 percent while year-on-year PPI increased to 4.27 percent. The increase in exchange rate caused inflation figures to show an upturn while achieving year-end target has become difficult. Central Bank of Turkey (TCMB) may revise its inflation target. Year-end target of TCMB is currently 5 percent. Furthermore, the report released by TCMB following the Board of Money Policy meeting last week indicated a revision, by expressing that achieving the inflation target was difficult for 2006.