Page 48 - TURKRptDec21

6.2 Central Bank policy rate
Turkey’s government-run banks cut their corporate loan rates by another 100bp as of November 19 after the central bank on November 18 cut its policy rate by 100bp to 15%, according to “information obtained by state-run Anadolu Agency’s reporter”.
The government-run banks have also cut their monthly mortgage rates to 1.20% for homes cheaper than Turkish lira (TRY) 1mn ($90,100) and to 1.29% for homes more expensive than TRY1mn.
The 1.20% monthly rate implies an annual compound rate of about 15%.
There is speculation that Turkey’s President Recep Tayyip Erdogan wants to see monthly mortgage rates at below 1%, which would imply an annual compound rate of about 13%.
As of November 12, weighted average lira rates of the Turkish banking system as a whole (government and private-run combined) on corporate loans stood at 19.32% while mortgage rates stood at 17.14%, suggesting a limited decline since September when the latest policy rate cutting cycle began, according to latest data from the central bank.
No boom has yet been observed in the lira loans flow. Borrowers may wait until the rate-cutting cycle ends to obtain loans to access the lowest rates the cycle produces.
On October 25, the government-run banks were said to have cut loan rates by up to 200bp.
“Leaks” regarding the government-run banks’ loan rate cuts support speculation that the Erdogan regime is targeting a boom in corporate and mortgage loans this time round, rather than a full-blown loan boom such as was observed in 2020.
48 TURKEY Country Report December 2021 www.intellinews.com