ISTANBUL: Turkey's central bank, fighting to defend the lira, raised sharply its inflation forecast for 2014 to 6.6 percent from 5.3 percent on Tuesday.
"We have updated our 2014 inflation estimate by 1.3 points" the bank's governor Erdem Basci said in remarks broadcast live.
In its inflation report in October last year, the central bank's projection for year-end inflation was 5.3 percent.
Basci forecast the 2015 inflation mid-point at 5.0 percent and said the bank would use all means at its disposal to achieve this forecast, adding that inflation would slow from the second half of 2014.
He also said he was confident in the way the bank fought to arrest the fall of the lira, which has been hitting all-time lows nearly daily this year, pressured by a corruption scandal roiling the government and a tightening of US monetary policy.
But despite the central bank's reassurance, analysts said that inflation was likely to remain high this year.
"The higher inflation forecast really just reflects reality - core inflation in Turkey is high and, with tax hikes and the weaker lira, inflation is likely to remain persistently high this year," economist William Jackson at the London-based Capital Economics told AFP.
The central bank, which failed to arrest the fall of the lira with heavy intervention in the foreign exchange markets last week, announced on Monday an emergency meeting for late on Tuesday.
The lira recovered on Tuesday amid expectations that the central bank would raise its overnight lending rate despite the government's opposition to such a move on grounds that it could jeopardise growth.
The currency recovered to 2.2583 on Tuesday, after hitting a record low of 2.3331 to the dollar and 3.1950 to the euro on Monday.
The main Istanbul stock index also gained by 1.26 percent to 65,382.07 points.
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