Turkey banking watchdog to urge lower rates

ANKARA

Head of Turkey’s banking watchdog and representatives of banks will discuss calls by President Recep Tayyip Erdogan to lower rates on Friday.

“We expect our companies to be supported with loans and lower rates for personal [and] housing credits. We will discuss these issues today,” President of Banking Regulation and Supervision Agency, Mehmet Ali Akben, said ahead of a meeting with top officials of commercial banks.

Akben said Bank of England on Thursday also cut its rates to a historic low to boost its economy and growth, adding that Turkey should follow similar path.

“We expect support to growth. We believe salvation of the country is dependent on growth,” Akben said.

In a meeting held with attendance of top representatives from chambers of commerce and bourses at the presidential palace in Ankara on Thursday, Erdogan urged lenders, commercial banks, to reduce interest rates for home purchases to as low as 9 percent.

Top officials of government, as well as Erdogan, have repeatedly called the Central Bank to lower its key rates for over 2 years.

Erdogan's calls to commercial banks to lower rates came after the Central Bank started to cut rates last March.

Akben said the measures introduced by government and relevant institutions in the wake of a coup attempt were successful.

With no significant deterioration in loans, the banks are able to find finance and maintain their syndication credits without problems, he said.

Praising the Turkish people’s resilience against the foiled coup on July 15, which claimed more than 230 lives and injured at least 2,200 others, Akben said he expects banks to stand together with the people in getting over economic impact of the failed putsch.

“Now we will discuss those issues face to face. We will converse on the role of the banking sector with regards to normalization of markets and economy in the ordinary course,” Akben said.