The Turkish Lira weakened on Thursday after inflation data came in above expectations, increasing pressure on the central bank to tighten monetary policy. The annual inflation rate climbed to 10.26% in January, surpassing the consensus forecast of 9.9%.

Market Reaction

The currency’s depreciation reflects investor unease about the central bank’s ability to control inflation. Some analysts believe that further interest rate hikes may be necessary to stabilize the Lira and curb inflationary pressures.

Factors Contributing to Inflation

• Rising energy prices
• Increased food costs
• Lira’s depreciation impacting import prices

The central bank is expected to address the rising inflation in its upcoming policy meeting. The market will be closely watching for signals regarding future monetary policy decisions.