Aggressive rate-hiking cycle may be beginning to cool demand ISTANBUL: Turkiye’s annual inflation rate edged up to 61.98 percent in November, data showed on Monday, its highest level this year but just shy of expectations, signaling that an aggressive rate-hiking cycle may be beginning to cool demand. Month-on-month, consumer price inflation was 3.28 percent, according to the Turkish Statistical Institute, less than a forecast of 3.9 percent in a Reuters poll. Annual inflation was expected to have risen to 63 percent in November before ending the year at 67 percent, the poll showed. Price rises are seen peaking in May between 70-75 percent before dipping due to the monetary tightening cycle that is winding down. The data “adds to evidence that inflation pressures in the economy continue to cool,” said Liam Peach, senior emerging markets economist at Capital Economics. The “monetary tightening cycle is likely to come to an end with one final interest rate hike later this month,” he wrote. In October, annual inflation dipped for the first time in three months to 61.36 percent. Inflation soared after a currency crisis at the end of 2021 and touched a 24-year peak of 85.51 percent in October last year. This year, the lira has so far lost some 35 percent of its value, compounding the cost-of-living crisis for Turks. The monthly CPI was driven by an 11 percent jump in housing-related costs in November, while clothing and transportation costs were nearly flat, the data showed. Concern autos will become less affordable due to rising prices and the ongoing lira depreciation has driven sales to an annual record, up 60.8 percent in the January-November period, trade association data showed on Monday. The domestic producer price index was up 2.81 percent month-on-month in November for an annual rise of 42.25 percent. The latest run-up in inflation began in July on the back of tax hikes and a sharp decline in the lira following May elections. Since June, the central bank has reversed a yearslong policy of low rates that had long been favored by President Recep Tayyip Erdogan. It has hiked rates by 3,150 basis points to stem inflation and also adjusted a raft of credit rules. As part of Erdogan’s pre-election pledges, household monthly natural gas consumption up to 25 cubic meters was provided free until May next year. The lira weakened 44 percent against the dollar in 2021 and another 30 percent in 2022. Inflation fell to as low as 38.2 percent earlier this year, partly due to base effects and a relatively stable lira. The central bank raised its benchmark rate to 40 percent last month and said tightening will be completed in a short period of time. The bank said domestic demand appears to be moderating however its existing high level, along with stickiness in services prices, and geopolitical risks keep inflation pressures alive.