UPDATE 1-Turkish Sept inflation rises,cbank policy seen on track
* Rise broadly in line with forecasts
* Underlying trend seen downward
* Annual inflation remains above cbank target
(Adds details, background)
ANKARA, Oct 3 (Reuters) - Turkish inflation rose broadly in line with forecasts in September, data showed on Wednesday, and was not seen affecting expectations that the central bank will continue to ease monetary policy.
Recent tax and energy price hikes are set to push inflation higher in the short term but the underlying longer-term trend is seen lower.
"Today's data will not cause a change in central bank policy," said Bora Tamer Yilmaz, a vice president at Halk Invest, forecasting the bank will narrow its interest rate corridor by 100 basis points this month.
Turkey's consumer price index rose 1.03 percent month-on-month in September, compared with a Reuters poll forecast of a 1.10 percent rise, for a year-on-year increase of 9.19 percent, the Turkish Statistics Institute said.
The producer price index also rose 1.03 percent on the month, compared with a forecast rise of 0.62 percent, for an annual rise of 4.03 percent.
Annual inflation remains well above the central bank's year-end target of 5 percent and year-end forecast of 6.2 percent.
After the data, the lira stood unchanged at 1.7950 against the dollar , while the benchmark bond yield
dipped to 7.53 percent from 7.54 percent.
The central bank told economists on Tuesday recent tax hikes would lead it to revise up its year-end inflation forecast.
Bankers who attended the meeting said they were told tax increases would add 0.5 basis points to the central bank's year-end inflation forecast, although the bank said recent energy price hikes were already factored in.
Turkey's central bank cut its overnight lending rate for the first time in seven months on Sept 18 and hinted it could do more to try to cushion a slowdown in economic growth.
The bank cut the upper boundary of its interest rate corridor by 150 basis points to 10 percent, a bigger cut than economists had forecast.
(Reporting by Ozge Ozbilgin; Writing by Daren Butler; Editing by Nick Tattersall)
Keywords: TURKEY INFLATION/