The Turkish Statistical Institute (TÜİK) has announced the inflation figures for February. Inflation came in below expectations in February at 2.27 percent on a monthly basis. The annual inflation rate fell to 39.05 percent. Economists had predicted a monthly inflation increase of around 3 percent, with annual inflation expected to drop to 40 percent. The 12-month inflation index, which determines the rental rate increase ceiling, stood at 53.83 percent. In January, monthly inflation showed an increase of 5.03 percent, while annual inflation dropped to 42.12 percent. THE FASTEST INCREASE IN EDUCATION In February, the fastest increase was seen in education at 9.92 percent, followed by housing at 4.58 percent, and food and non-alcoholic beverages at 3.17 percent. Negative inflation was observed in clothing and footwear as well as in the health group. There was a decrease of 5.06 percent in clothing and footwear, and a 4.38 percent drop was recorded in the health group due to contribution payment updates. On an annual basis, the highest increase was in education at 94.90 percent, and the lowest increase was in clothing and footwear at 20.84 percent. HOW DID LEADING INDICATORS PERFORM? According to the Istanbul Chamber of Commerce (ITO) data, retail prices in Istanbul increased by 3.19 percent monthly in February. The annual increase stood at 45.35 percent. The kitchen inflation announced by Turk-Is recorded a 5.39 percent increase in February. EYES TURN TO INTEREST RATE DECISION Following the inflation data, attention has shifted to the Central Bank’s interest rate decision. The Monetary Policy Committee will convene on Thursday to decide on the policy rate. Economists are expecting a 250 basis point cut in the policy rate, bringing it down to 42.5 percent. End-of-year policy rate expectations are currently around the 30 percent mark… In January, the CBRT lowered the interest rate by 250 basis points to 45 percent.