Turkish cenbank: decline in underlying trend of inflation continue in June

The Turkish central bank said on Thursday that leading indicators suggest the underlying trend of inflation continued to decline in June.

In the minutes of its policy setting meeting last week, in which it kept interest rates steady, the bank said prices of transport services were expected to rise but services items excluding transport and rents have followed a mild course.

"In the unprocessed food group, leading indicators for the first half of June imply that the rise in fresh fruit prices, which were affected by the agricultural frost, has been offset by the fall in vegetable prices. On the other hand, processed food inflation remains low across the group," it said.

Last week, the central bank held its key interest rate steady at 46% and vowed to keep tight monetary stance will be until price stability is achieved.

The central bank also said data for the Q2 point to a slowdown in domestic demand while inflation expectations and pricing behavior continue to pose risks to the disinflation process.