Inflation hits three year high

Turkish inflation accelerated for a fourth consecutive month in January on increasing food prices.

The inflation rate rose to 10.6 percent, the highest since November 2008, the statistics agency(TUIK) in Ankara said on its website today.

BASCI: MIGHT MISS ITS TARGET BY A LITTLE
Turkey has taken the necessary steps to battle inflation yet might miss its target by a little, central bank governor Erdem Basci said last month.

He lifted his forecast for year-end to 6.5 percent, compared with an official goal of 5 percent.

Inflation surged last year when the lira lost value as investors pulled money out of emerging markets, prompting Basci to adopt a policy of varying interest rates on a daily basis to squeeze liquidity and help manage volatile capital flows.

'A REVISION IN  THE WAY TURKEY CALCULATES INFLATION MAY LEAD TO A FALL'
A revision in the way Turkey calculates inflation may lead to a fall in the rate, JPMorgan Case & Co. said.

The government's statistics office will now take account of the impact of quality changes on the price of goods, singling out only the true price effect, JPMorgan said in an e-mailed report today.

This is a step in the right direction and should lead to a modest decline in inflation, the report said. Other changes related to the weight in inflation of goods and services is routine and should not have a meaningful impact, JPMorgan said. Similarly, a minor change in the calculation of high volatility goods such as fruits and vegetables should limit volatility, though the impact on the headline number will be very small, it said.

Bloomberg