Turkey's disinflation process in March withstands Middle East conflict pressure; the lira proves more resilient than the South African rand

Golden Ten Data reported on April 3 that despite economic pressure from the Middle East conflict, Turkey’s annual inflation in March slowed more than economists had expected. According to data released by the national statistics office on Friday, Turkey’s annual price increase in March was 30.9%, down from 31.5% in February and lower than the median forecast of 31.4% given by 20 analysts surveyed. Turkish assets reacted steadily. The Istanbul Banks Index retreated 0.1% after rising, the 10-year government bond yield fell by 14 basis points, and the lira weakened by 0.3% against the US dollar. In response to the emerging-market sell-off triggered by the conflict, the central bank governor, Fatih Karahan, said earlier this week that tight policy would be maintained to curb inflation. Last month, monetary policy makers ensured the lira only depreciated by 1.2%—outperforming the South African rand and the Chilean peso—through gold sales or swaps and foreign exchange intervention by state-owned banks.