The central bank raises its 2026 inflation forecast to 28 percent

Governor Fatih Karahan presented the year's third inflation report on Thursday and lifted the end-2026 forecast from 26 to 28 percent, while leaving untouched the 24 percent intermediate target that guides policy. He attributed the two-point revision to diesel, natural gas and non-energy commodity prices, and raised the year-end food inflation assumption from 26.3 to 28.5 percent. The policy rate has been held at 37 percent since March and July inflation ran at 31.75 percent, so the gap between target and outturn is what the September rate decision now turns on.

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