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Fitch sees Turkey holding interest rates steady until 2023 elections

REUTERS/Dilara Senkaya
People change money at a currency exchange office in Istanbul, Turkey, on November 23, 2021.

Turkish central bank is likely to keep its benchmark interest rate steady at 13 percent until the national and presidential elections next year, a Fitch Ratings official said on Wednesday.

In a webinar on the impact of commodity prices, inflation and rising rates on banks in Turkey, Middle East and Africa, the official said they expected the rates in Turkey to be hiked after the elections.

Earlier this month, source said that some Turkish banks were curtailing corporate lending after the government’s latest raft of regulations raised their costs and forced many to cut their balance sheet risks.

The credit and collateral regulations rolled out in recent months have caused confusion and raised many questions from banks, the unnamed sources said.

As inflation has soared to a 24-year high, the lira has shed more than half its value versus the dollar in two years, largely, most economists say, due to the interest rate cuts and economic mismanagement.