(Adds analysts' comments, lira, background)
By Selcuk Gokoluk
ANKARA, Nov 3 (Reuters) - Turkish consumer price inflation sharply exceeded forecasts in October, official data showed on Monday, but the figures were not seen affecting expectations that interest rates will remain on hold.
The Turkish Statistics Institute said consumer prices rose 2.60 percent month-on-month in October, compared with a forecast rise of 1.55 percent, for a year-on-year rise of 11.99 percent.
The producer price index rose 0.57 percent month-on-month in October, well below a forecast rise of 1.7 percent, for an annual rise of 13.29 percent.
Turkey's central bank left its key borrowing rate unchanged last month and said further moves on rates would depend largely on global market developments, which pounded the lira currency last month.
"The central bank will still most likely not change rates this month, though that may happen if there is a big change in the exchange rate," said Murat Ulgen, chief economist of HSBC in Istanbl.
He said the effect of the exchange rate was not as noticeable as expected, though it may have a more pronounced effect in the coming months.
The lira
On Friday, the central bank had raised its forecast for end-2008 inflation by 0.5 percentage points to 11.1 percent, well above an official 4 percent target.
CLOTHING PRICES SURGE
Economists noted that by far the biggest rises in the month were in clothing and footwear consumer prices, which surged 8.46 percent on the month.
Food and non-alcoholic drinks were up 3.91 percent over the same period.
"When we look at the CPI data excluding seasonal factors the increase is 0.97 percent. The group which showed the biggest rises were clothing and footwear which is down to new season openings," said Akbank economist Seltem Iyigun.
The biggest year-on-year CPI rise was shown by housing prices, which were up 27.08 percent.
The data leaves the central bank with the dilemma of balancing efforts to slash inflation while addressing concerns about high interest rates limiting Turkish economic growth.
"The central bank has said that there would be a temporary increase in October so they were aware inflation would be higher. We don't see any unexpected reaction from them in October," said Haluk Burumcekci, economist at Fortis in Istanbul. (Writing by Daren Butler; editing by Stephen Nisbet)