LONDON - British economy newspaper Financial Times (FT) wrote that Turkish Central Bank raised inflation target because it did not want its monetary policy to create too many barriers to economic growth.
Written by Vincent Boland, the article said Turkish economy grew 7.5 percent in the last five years. "The central bank nearly doubled its inflation target for 2009, raising it from 4 percent to 7.5 percent. It also raised its target for 2010 to 6.5 percent and for 2011 to 5.5 percent. The bank said it was doing so because it does not want its monetary policy to create too many barriers to economic growth," wrote Boland.
"The move won the backing of the government, with which the bank has seemed to be at odds in recent months because of a conflict between monetary policy, which is being tightened, and fiscal policy, which is being loosened," he added.
The newspaper wrote, "Turkey is one of the most closely followed emerging markets. Foreign investors, who own about 70 percent of Istanbul's stock market, have been questioning for months the central bank's inflation-fighting strategy and have been sceptical of its targeting regime."
Boland wrote, "Turkey's inflation rate was about 70 percent in 2000, and one of the big successes of its economic and structural reform programme in recent years has been to bring it down to single figures."
He said, "Durmus Yilmaz, governor of the bank, told the Financial Times in an interview earlier this year that the targets set in 2006 were too ambitious."
(GC-MS)
(ECO)