Year-end inflation forecast down to 6.2 pct as risk perceptions recover

Başçı was sharing the details of the bank's July Survey of Expectations report with the press. The governor said a noticeable recovery in money influx into emerging markets starting from June, combined with better-than-expected market indices, has minimized inflationary pressure in Turkey. “Positive indices, particularly in inflation and current account deficit (CAD), have helped recover risk perceptions of foreign investors regarding Turkey,” he explained. Başçı said global investor risk appetite showed a nascent recovery, following earlier signals that Athens would find an exit line out of turmoil, adding, “However, current news from Spain have weakened this belief.” Markets have fretted over the past few days over fears that Spain, the eurozone's fourth-largest economy, may need a bailout along the lines of Greece, Ireland and Portugal. Başçı pointed out that most central banks worldwide stick to an expansionary monetary policy, adding that Turkey places heavy emphasis on maintaining financial stability. The Central Bank of Turkey earlier cut a number of interest rates used as tools to fund banks and other financial institutions in a move to ease its monetary policy, Londra 2012 açılış seremonisi narrowing what is called the “interest rate corridor” from only its higher end. “This way we managed to get bank loan growth under control while minimizing fluctuations in foreign exchange rates. … This will strengthen our hand in keeping inflation far below two-digit levels,” he stressed