By Oliver Gray
Investing.com - The Turkish Lira continues to trade in a volatile fashion, recovering 40% from its recent record low of 18.4 touched two weeks ago after state-backed market interventions, and after Erdogan announced a scheme to protect lira deposits against currency volatility.
As a result, Turkey's annual inflation rate surged to 36.08%, the highest reading in the 19 years that Tayyip Erdogan has ruled, beating expectations of a 30.6% rise, breaching the 30% level for the first time since 2003 and deepening the country’s currency crisis engineered by the president's unorthodox interest rate-cutting policies.
Turkish Statistical Institute data showed that consumer prices rose 13.58% through December, eating deeper into the earnings and savings of Turks rattled by the economic turmoil.
Some economists predict inflation could reach as high as 50% by spring unless the direction of monetary policy is reversed. Goldman Sachs (NYSE:GS) said it would remain above 40% for most of the year ahead.
Additional data showed that December's producer price index rose 19.08% month-on-month and 79.89% year on year. Annual transportation prices soared 53.66% while the food and drinks basket jumped 43.8%, the CPI data showed.