The Central Bank on Monday raised Turkey's year-end inflation forecast from 7.9 percent to 8.4 percent under a tight monetary policy stance, which focused on bringing down inflation.
Speaking at a news conference in Istanbul ahead of the release of the bank’s quarterly inflation report, Central Bank Governor Murat Cetinkaya said inflation would stabilize at around five percent in the medium term.
Cetinkaya said the inflation rate would fluctuate between 7.2 percent and 9.6 percent through to the end of 2018.
"The upward revision to the end 2018 inflation forecast stemmed from the adjustment in the Turkish liras denominated import price assumption due to oil prices and exchange rate developments," he said.
Turkey's annual inflation rate hit 10.23 percent in March 2017, according to the Turkish Statistical Institute.
The Central Bank had earlier raised its mid-point forecast for 2018 to 7.9 percent from a previous forecast of 7 percent in its January report.
"Inflation is expected to return to its downward trend on the back of recent monetary policy decisions and measures," Cetinkaya said.
Meanwhile, the Central Bank kept its 2019 year-end inflation expectation unchanged — 6.5 percent — fluctuating between 7.2 and 9.6 percent.
The bank increased its oil price forecast to $68 per barrel for 2018 from $66 in the previous report, and to $65 for 2019.
"In view of the measures in the agenda of the Food and Agricultural Products Markets Monitoring and Evaluation Committee, the assumption for food inflation is kept unchanged at 7 percent for both end 2018 and end 2019," he added.
The committee also assessed the technical presentations on finalizing the simplification process of the monetary policy’s operational framework and enhancing the predictability of monetary policy.