Turkish inflation cooled for the second straight month in June, data showed on Monday, as a drop in food prices led to a lower-than-expected 10.9 percent increase in annual consumer prices. The data, which marks a further fall from the 8 1/2-year peak of 11.87 percent hit in April, is unlikely to much affect the central bank's tight monetary policy stance, economists said.
President Tayyip Erdogan has repeatedly called for cheaper credit, putting the CBRT central bank in the unenviable position of trying to balance his drive for lower rates with the need to rein in double-digit inflation.
"While we do not know how surprising June inflation was for the CBRT, we do not expect it to cause a substantial change in monetary policy in the short run," said QNB Finansbank economist Deniz Cicek.
Food prices dropped 1.06 percent on the month and clothing and transport prices also fell, offsetting increases in education, restaurants and hotel costs, Monday's data showed. Producer prices rose 0.07 percent month-on-month in June for a year-on-year rise of 14.87 percent, the data showed.