The Central Bank of the Republic of Turkey (CBRT) on Monday increased its 2018 year-end inflation forecast to 8.4 percent from 7.9 percent.

Speaking at the presentation of the Second Inflation Report in 2018 in Istanbul, CBRT Governor Murat Çetinkaya said that the bank expects, with 70 percent probability, the increase in the consumer price index to remain between 7.2 percent and 9.6 percent with a midpoint of 8.4 percent.

The bank maintained 6.5 percent inflation forecast for 2019 announced in the previous report.

It also said that the inflation will stabilize at 5 percent in medium term.

"The upward revision to the end 2018 inflation forecast stemmed from the adjustment in the Turkish lira-denominated import price assumption due to oil prices and exchange rate developments," Çetinkaya said.

Turkey's annual inflation rate hit 10.23 percent in March 2017, according to the Turkish Statistical Institute.

The CBRT had earlier raised its midpoint forecast for 2018 to 7.9 percent from a previous forecast of 7 percent in its January report.

"Inflation is expected to return to its downward trend on the back of recent monetary policy decisions and measures," Çetinkaya said.

The bank increased its oil price forecast to $68 per barrel for 2018 from $66 in the previous report, and to $65 for 2019.

"In view of the measures in the agenda of the Food and Agricultural Products Markets Monitoring and Evaluation Committee, the assumption for food inflation is kept unchanged at 7 percent for both end 2018 and end 2019," he added.

The committee also assessed the technical presentations on finalizing the simplification process of the monetary policy's operational framework and enhancing the predictability of monetary policy.

Çetinkaya said that the recent interest rate hike in the late liquidity window from 12.75 percent to 13.5 percent in April stems from the bank's aim to limit the risks on inflation.

He added that global growth forecasts for the first quarter of 2018 point to a rise compared to the previous quarter, while annual growth forecasts for developed and developing economies have also been updated positively.