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While loan rates rose in parallel with Central Bank (CBRT) interest rate increases, the banks’ credit taps were closed.
With the decision made yesterday, the CBRT raised its policy rate from 15 percent to 17 percent, while the banks’ average consumer loan rates rose to 22.92 percent in the week of December 18. Loan rates are expected to exceed these levels.
In the week of December 18, average interest rose to 19.10 percent on auto loans, 18.71 percent on home loans, and 17.08 percent on business loans.
Average interest rates on consumer loans fell to 8 percent in April.
According to BRSA data, while interest rates increased, the volume of loans in TL from banks decreased by 2.9 billion TL in the week of December 11-18. The volume of loans in TL from banks, which increased by an extraordinary amount of TL 702 billion in the 11 months between December 27, 2019 and November 27, 2020, has entered a downward trend in The last weeks.
WORKS INVESTED IN PUBLIC BANKS
In the week of December 11-18, the volume of loans in TL decreased by TL 5.3 billion in public deposit banks and TL 1.6 billion in domestic private deposit banks. The volume of TL loans from foreign private deposit banks increased by TL 4.2 billion in this period.
TL 412 billion, or 58.7 percent, of the TL 702 billion increase in loan volume between December 27, 2019 and November 27, 2020 came from public banks.
CURRENCY AND INTEREST VARIOUS CYCLE
Turkey’s economy has entered a long-standing vicious cycle between exchange rates and the interest case. Attempts by the government to open credit taps with lower interest rates, considering successive elections, were followed by rapid increases in exchange rates and inflation.
In order to control exchange rates and inflation, the Central Bank carried out sharp increases in interest rates in the November-December 2020 period after September 2018. The exchange rate and inflation were controlled for a period after September 2018 with strong increases in interest rates, but then the same cycle was repeated.
Treasury and Finance Minister Berat Albayrak and CBRT President Murat Uysal went to their places with Lütfi Elvan and Naci Ağbal, with the dollar / TL exchange rate as of 2020 at 5.95, breaking a record with 8.57.
The administration of the new economy made strong interest increases to control the currency and inflation and to attract foreign hot money again. Loans are expected to contract as interest rates rise and economic activity to slow.
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