Turkey's consumer price inflation rose again in July after a slowdown in June, official figures showed Wednesday. In May, inflation was at a six-month high.

Inflation rose to 6.31 in July from 6.24 percent in June, the Turkish Statistical Institute said. Economists were looking for a 6.7 percent increase.

Transportation costs advanced 9.81 percent from last year. Food and non-alcoholic beverages prices moved up 7.65 percent. Prices of clothing and footwear were 6.93 percent higher than last year.

On a monthly basis, consumer prices fell 0.41 percent compared to expectations of a 0.07 percent decline.

Meanwhile, producer price inflation climbed to five month high of 10.34 percent in July from 10.19 percent in June. Month-on-month, prices fell 0.03 percent

Turkey's central bank forecasts inflation to be around 6.9 percent at the end of 2011, on assumption that the annual credit growth declines to 25 percent at the end of the year, and policy rate remains constant
until the end of 2011.

The bank predicts inflation to slow to 5.2 percent at the end of 2012. Inflation is expected to stabilize around 5 percent in the medium term, the bank said in its latest inflation report released last month.

In July, the central bank left the key interest rate unchanged at 6.25 percent for the sixth month in a row, and said it would narrow the interest corridor gradually, citing increasingly uncertain global economic outlook and the slowdown in domestic economic activity.

The bank also decided to reduce the reserve requirement ratios on banks' foreign exchange deposits. The move is expected to add $590 million of extra liquidity into the system from August 5.

rttnews.com