Year-end policy rate seen at 8.25%
Inflation climbed to 12.62% in June
ISTANBUL, July 17 (Reuters) - Turkey's central bank is expected to keep its policy rate unchanged at 8.25% next week, a Reuters poll showed on Friday, after it halted a nearly year-long easing cycle last month citing a rise in inflation.
The bank cut its policy rate from 24% to 8.25% in less than a year, at first to pull the country out of a recession and later to stimulate the economy as it faced the coronavirus pandemic.
It unexpectedly halted the easing cycle last month, citing upward pressure on inflation. The pandemic "led to some increase in the trends of core inflation indicators," the bank said.
Inflation climbed more than expected to 12.62% year-on-year in June, official data showed, after it edged up to 11.39% a month earlier.
All 12 economists polled expect rates to stay at 8.25% at when the bank announces its decision at 1100 GMT on Thursday.
Morgan Stanley analysts said in a note they expect no change because core inflation was the main concern in last month's meeting, with the central bank's July survey of inflation expectations showing analysts now expect year-end inflation of 10.2%, well above the bank's current forecast of 7.4%.
In April, the central bank trimmed its year-end inflation forecast to 7.4% and has said "disinflationary effects will become more prevalent in the second half of the year."
The median estimate of nine economists in the Reuters poll for the policy rate at year-end stood 8.25%, with one participant expecting a further cut to 8%.
The median estimate for the policy rate at year-end was 7.75% in last month's poll, after declining from 10% in the February poll.
(Reporting by Ali Kucukgocmen Additional reporting by Karin Strohecker in London)
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