Annual consumer inflation, which was 29.73% in September, rose to 29.77% in October with a limited increase. Economists had expected a monthly increase of 2.2%. The Domestic Producer Price Index (D-PPI) increased by 1.65% monthly and 27.41% annually.
With the October data, the maximum rent increase rate applicable to residential and commercial rents to be renewed in November was determined as 31.23% based on the 12-month average CPI. This rate was 31.49% in October.
Minister of Treasury and Finance Mehmet Şimşek stated that annual consumer inflation decreased by 3.1 points compared to October last year, and the decline was widespread except for transportation services and energy. Drawing attention to a 7.1-point decrease in food and 7.9 points in services, Şimşek noted that rising energy prices due to the war limited disinflation. Şimşek said that in the coming period, the balanced course of economic activity, the expected decline in energy and commodity prices, improvement in expectations, and reduced inertia in services inflation will support the decline in inflation.
The 12-month average of the D-PPI at the end of October was 27.83%. This rate will be applied to many tax, fee, and penalty amounts in 2027. For example, according to this figure, the IMEI registration fee may rise from 54,258 lira to 69,358 lira, the 10-year passport fee from 13,410.40 lira to 17,142.5 lira, and the B-class driver's license fee from 6,754.60 lira to 8,634 lira. The first violation penalty for running a red light, currently 5,000 lira, may increase to 6,391 lira when fractions are dropped. In the lowest tax bracket, the annual motor vehicle tax (MTV) for a 1-3 year old car with engine capacity not exceeding 1300 cc may rise from 5,750 lira to 7,350 lira, and the exit fee abroad from 1,250 lira to 1,590 lira by dropping fractions below 10 lira. However, these figures are not finalized tariffs. Since President Recep Tayyip Erdoğan has the authority to change the rate, the final amounts will be clarified through official regulations.
Not investment advice.
The rise in annual inflation to 29.77% could create depreciation pressure on the Turkish lira and support an upward trend in EURTRY. However, with RSI14 at 76.5 in overbought territory, upside potential may be limited in the short term. The price is trading above SMA20 and SMA50, and MACD is above its signal line and positive; the technical picture remains bullish. As the inflation data may already be priced in, the reaction could be limited. A moderate upward bias is expected in the short term, but correction risk due to overbought conditions should not be overlooked.
The rise in October inflation to 29.77% could increase depreciation pressure on the Turkish lira and support an upward bias in USDTRY. However, the price already stands at 50.02 and the 24-hour change is only 0.015%, suggesting the market may have largely priced in this data. RSI at 52.5 is in neutral territory and slightly above the MACD signal line, indicating limited momentum. SMA20 and SMA50 around 49.98-49.99 can be monitored as a short-term support zone. Still, an inflation surprise could trigger additional selling in the lira; the 1-3 day outlook points to a moderate upward bias.
