Page 13 - TURKRptJul22

2.2 More “macroprudential measures, financial instruments, non-capital controls...”
Erdogan’s latest finance minister often reiterates that they are open to any suggestions, excepting a rate hike.
- On June 9, the finance ministry launched a “state enterprise income-indexed bond” that offers 20-25% return.
- The banking watchdog BDDK set a maximum 24-month maturity for consumer loans at between TRY 50,000 and TRY100,000 lira (previously 36-month) and a maximum 12-month maturity for consumer loans over TRY100,000 (previously 24-month).
(For loans below TRY50,000, the maximum maturity remained unchanged at 36-month.)
- The BDDK also hiked the minimum repayment limit on credit card debts to 20% of the total debt for amounts that are lower than TRY25,000 and to 40% for amounts higher than TRY25,000.
Consumers who have been buying basic food items on credit are set for tougher times.
- The BDDK also said that it would take some more “quick steps” to
● differentiate loan to price ratios for mortgage loans
● channel loans to investments
● hike risk weights for loans that are extended to legal persons that carry out swap transactions with foreigners
● and introduce a swap window via private placements to foreigners.
- The capital markets board (SPK/CMB) reduced its fees in order to encourage foreign funding for initial public offerings (IPOs) and local companies to sell papers abroad.
The joke doing the rounds was that foreigners’ only concern was the SPK fees.
- The SPK also launched a commodity market on the Borsa Istanbul and it is working on gold certificates.
- On June 14, the central bank introduced a reserve requirement for banks. Banks are required to hold between 3% and 10% of government bonds with at least a five-year maturity at the central bank for FX deposit accounts.
Recently, banks have preferred CPI-indexed papers.
The yield on 10-year domestic paper fell to the 18%s.
- On June 24, the BDDK said companies with more than TRY15mn ($0.9mn) worth of FX-denominated deposits will not be allowed to obtain lira-denominated loans if their FX deposits exceed 10% of their total assets or annual revenues.
13 TURKEY Country Report July 2022 www.intellinews.com