European Financial News - Kimura Financial Question Turkey Guidance
Released on: June 23, 2008, 4:11 am
Press Release Author: Biz Nice
Industry: Financial
Press Release Summary: Kimura Financial analysts frustrated with lack of information from the Turkish Central Bank following their sharply raised inflation forecasts for the next three years, citing soaring energy and commodity prices as the primary cause.
Press Release Body: The views from Kimura Financial are thought to reflect the general sentiment of the investment community with respect to Turkey - one of the world's largest emerging economies, after many observers have become skeptical of the inflation-targeting policy of Turkey\'s central bank, suggesting that their policies were too ambitious. According to a source close to Kimura Financial, Turkey's inflation rate was about 70 per cent 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. Inflation-targeting monetary policy was introduced in 2006, however inflation in May this year was an annual 10.7 per cent, far above the 4 per cent target. The bank, which had already missed its targets in 2006 and 2007, faced the prospect that it would do so again for a third year in succession.
The Kimura Financial source apparently concluded that the revision will \"surely damage the nations credibility and monetary policy\" and made reference to South Africa, who when faced with a similar scenario, refused to revise targets for precisely these reasons.
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