Languages —

Thursday, September 29, 2022

More

    Turkish Central Bank takes action to increase loan availability

    Share This Post

    Somali Magazine  -New macroprudential measures to address loan growth and the interest rates on commercial loans were announced by the Central Bank of Turkey on Saturday.

    The bank stated in a statement that the action aims to promote financial stability and reinforce the monetary transmission mechanism and cited the recent rise in the disparity between its policy rate and loan interest rate as justification.

    Depending on the coefficient on the interest rates on the commercial loans they would grant, the lenders will need to maintain treasury bonds.

    For banks, “maintenance of securities at a ratio of 30% will replace the reserve requirement maintenance applied at a ratio of 20% to boost the efficiency of the practise.”

    The announcement stated, “For commercial loans, 20% of the loan amount to be extended at an annual compound interest rate that is 1.4 times higher than the annual compound reference rate published by CBRT.”

    According to the statement, the facility rate will be applied as 90% if the loan interest rate is 1.8 times or more than the reference rate.

    The bank suddenly reduced its interest rate on Thursday, dropping it from 14% to 13%.

    Share This Post