Turkish central bank details policy simplification measures
Business
Export, investment, earthquake zone loans to be exempted from credit restricting measures
ISTANBUL (Reuters) – The Turkish Central Bank said on Tuesday it had set the monthly growth limit for lira commercial loans at 2.5 per cent, down from a previous 3pc, excluding export, investment and agriculture loans, to complement steps taken in a policy simplification process.
Last week, the bank hiked its policy rate by 250 basis points to 17.5pc, continuing to reverse President Tayyip Erdogan's low-rates policy as it promised more tightening.
After that policy meeting the bank said the simplification process would continue gradually and selective credit and quantitative tightening decisions were taken to support the monetary tightening process.
Among the steps, a reserve requirement ratio of 15pc on FX-protected accounts was announced on July 21.
The bank said on Tuesday it had also decided to set the growth limit for vehicle loans at 2pc, down from 3pc, and to keep the 3pc limit for general purpose loans unchanged.
The monthly maximum interest rate applied to credit card cash utilization and overdraft accounts was raised to 2.89pc to control inflation and balance domestic demand, it also said.
Export and investment loans as well as loans for the earthquake zone will be exempted from the bank's credit restricting measures.
Steps have also been taken to support exporters’ access to financing, with the daily limit for rediscount credits raised to 1.5 billion liras.
