ISTANBUL: Turkish inflation eased further in May to 35.4 percent, reaching its lowest level since November 2021, official figures showed Tuesday, paving the way for a possible interest rate cut.
Consumer price rises have now eased for 12 months in a row, after soaring to 75 percent in May last year.
Turkey’s central bank (CBRT) raised its key interest rate to 46 percent in April after protests over the arrest of Istanbul’s opposition mayor put pressure on the economy and caused the lira to slump against the dollar.
The move also came amid uncertainty over the effects of US President Donald Trump’s tariffs.
The central bank had previously lowered rates as inflation fell.
“The larger-than-expected fall in Turkish inflation in May, to 35.4%, will increase the CBRT’s confidence that it can restart its easing cycle soon,“ said Nicholas Farr, emerging Europe economist at London-based Capital Economics research firm.
“While we had thought the easing cycle would resume in Q3 (the third quarter), a rate cut this month is now not out of the question,“ Farr said.
The ENAG group of independent economists disputes the official inflation rate, estimating the May figure stood at 71.2 percent.
