2018.10.2303:23:00UTC+00Turkey Consumer Confidence Lowest In Nearly A Decade

Turkey's consumer confidence deteriorated for a third straight month to its lowest level in nearly a decade during October as inflation rocketed to a 15-year high in the previous month.

The consumer confidence index dropped to 57.3 from 59.3 in September, data from the Turkish Statistical Institute showed on Tuesday. The reading was the lowest since December 2008, when it was 56.7.

Households' financial expectations and their view on unemployment situation in the next 12 months weakened sharply.

Expectations regarding the economy also eroded. However, consumers plan to save more in the next 12 months.

Headline inflation shot up to 24.52 percent in September, which was the highest in 15 years.

The Turkish central bank is set to hold its policy session this week. Economists widely expect the bank to leave interest rates unchanged at 24 percent. "Given the 625 basis point front loaded hike in September, the ongoing strengthening of the lira on the back of Pastor Brunson's release and subsequent signals from the US on lifting some sanctions have all been feeding optimism that geopolitical risk for Turkey may finally be improving," ING economist Muhammet Mercan said.

"However, given the marked deterioration in price-setting behavior as observed by the big inflation surprise in September and forward-looking expectations, a further adjustment in monetary policy to push the ex-post real policy rate back to positive levels should not be ruled out."