Basci Winning Street Cred as Turkey Inflation Bets Tumble
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Turkey’s central bank Governor Erdem Basci is winning the respect of bond investors, who are betting he will drive inflation toward his target even as he trims interest rates faster than predicted.
Market expectations for inflation over the next two years fell by 22 basis points to 5.78 percentage points after Basci lowered the benchmark repurchase rate by 0.75 percentage point on June 24, exceeding the 0.5 percentage-point forecast in a Bloomberg survey. That’s the lowest so-called break-even rate since September and compares with annual consumer-price gains of 9.7 percent in May.