Turkey's key annual inflation rate rose more than expected to 12.15% in January, climbing for the third straight month after a dramatic drop last year and testing the central bank's resolve to extend an aggressive policy easing cycle.
A Reuters poll forecast that year-over-year consumer price inflation, which slipped as low as 8.55% in October, would remain mostly flat at 11.86% last month.
The lira traded flat after the release of the data, standing at 5.9845 against the dollar, and analysts said the currency would need to remain stable in the months ahead to keep the door open to further interest-rate cuts.
Month-on-month, Turkish consumer prices rose 1.35% in January, compared with a poll forecast of 1.10%.
A currency crisis in 2018 sent inflation surging to a 15-year high above 25%. But it has since declined and briefly touched single digits last year, allowing the central bank to cut interest rates to 11.25% from 24% in July.
The bank, which has consistently delivered more easing than analysts expected, has remained optimistic that inflation will drop towards 8.2% by year end, keeping the door open to a bit more monetary stimulus.