Turkey CB lowers interest rates on credit cards

ANKARA: Turkey’s central bank (CB) lowered the maximum limit for monthly interest rates on credit cards to 1.40 per cent from 1.60 per cent previously for Turkish lira, the statement on the Turkey’s Official Gazette said.

It lowered the interest rate for foreign currency debt on credit cards to 1.12 per cent, those for delayed payments in Turkish lira to 1.70 per cent and those for delayed foreign currency payments to 1.42 per cent, the statement said.

The Turkish central bank said it increased reserve requirement ratios for foreign exchange deposits by 200 basis points for all maturity brackets to support financial stability.

“As a result of these revisions, approximately $2.9 billion of forex liquidity will be withdrawn from the market,” it said in a statement. The revised ratios will be effective immediately, it said. Earlier the International Monetary Fund said that Turkey’s monetary policy easing had “gone too far” and called on Ankara to ensure that fiscal policy remained a main policy anchor. The central government’s budget deficit has wide ned this year a sankara ramped up spending in the wake of a currency crisis that drove the country into recession.

In September, Ankara revised its budget deficit forecast for 2019 to 125 billion lira ($21 billion) from 80.6 billion lira previously.

“While the recent fiscal stimulus has helped the economy recover, the underlying deficit has increased significantly. directors recommended a broadly neutral fiscal stance in 2020,” theimfsai din its executive board assessment, adding that a “modest consolidation” is needed to ensure public debt remains low.