Turkish central bank chief says inflation decline continues, urges caution

Fatih Karahan said data shows inflation is still declining despite supply-side difficulties, stressing that inflation expectations warrant continued caution.

• Karahan, presenting in New York, said supply-side shocks substantially affect headline inflation and that services inflation remains, though its underlying trend has slowed.
• He said economic growth has slowed amid weak domestic demand, with indicators pointing to further demand slowdown in the third quarter.
• Karahan said external shocks and domestic transmission channels will determine inflation's future path, while foreign exchange reserves remain strong.