Turkish markets slip, nervous about graft probe, inflation | GulfNews.com:
"Turkey’s lira weakened on Friday as markets concluded a higher-than-expected inflation reading was not enough to trigger an interest rate hike, with investors remaining uneasy about a festering corruption scandal.
The weakness of the lira and higher-than-expected global oil prices have driven inflation higher in recent months, prompting the central bank in October to raise its inflation forecasts for the full year.
Data on Friday showed inflation was slightly higher than expected in December. The lira rose immediately after the release but as analysts concluded price pressures were still not enough to persuade the central bank to hike rates, gains were erased.
“The mix of [a] weaker [lira], higher rates and higher political risk premium suggests there’s a significant downside risk to our 3.5 per cent GDP growth forecast for 2014,” a note from Bank of America Merrill Lynch said."
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