Turkish inflation slows for the first time since October 2020, after the price of oil managed to offset some price increases in goods and services in the country while slowing economic activity was affected by the coronavirus.

Consumer prices rose at an annual rate of 11.86% in March, down from 12.4% in February, according to official figures released on Friday. This is also the lowest since December when annual inflation was 11.84%.

Turkish authorities are currently busy preparing a response to the coronavirus crisis in support of the economy. Complementing the government’s stimulus, Turkish Central Bank Governor Murat Uysal reduced the key interest rate to 9.75% by a percentage point and announced measures to stimulate liquidity and accelerate government debt purchases.

“Inflation will remain around the 10% level for some time, as the Turkish Central Bank really does not make significant efforts to combat it”, said Timothy Ash, a strategist at Bluebay Asset Management.

Price pressure shows no sign of palpable relief. Core inflation, which excludes volatile components such as food and fuel, rose in March to 10.5%, the largest jump since August.

Since the beginning of the year, the Turkish lira has weakened by 11% against the US dollar, with the depreciation lagging far behind other emerging markets such as Brazil or South Africa. State-owned banks in Turkey continue to boost the currency by selling dollars and fueling legal changes that make it harder for investors to bet against the pound.

As demand shrinks due to the coronavirus pandemic, currency effects on prices will be more limited.

The depreciation of crude oil has allowed the local authorities to cut gas and diesel prices in March. Annual fuel inflation dropped to 9.8% from 15.5% in February. Turkey is a net importer of oil.