Banking & Finance Turkey lowers reference interest rate for September By Reuters August 25, 2022 Creative Commons The central bank unveiled new required bond holdings for lenders to address widening gap between the bank's policy rate and lending rates. Turkey’s central bank lowered its reference interest rate to 15.34 percent for September, from 16.32 percent in August, according to an official document, in a move that is likely to lower interest rates on corporate loans. On Saturday, the central bank unveiled new required bond holdings for lenders meant to address the widening gap between the bank’s policy rate and lending rates. One requirement is that lenders to hold bonds for corporate loans extended at certain coefficients above the central bank’s reference rate. It recently mandated lenders to maintain up to 90 percent bonds for some corporate credits according to the level of interest rates, effectively discouraging banks to lend with high rates. Bankers say the central bank’s limiting of loan growth to 10 percent for some corporate loans will slow the lending market. Turkish authorities have previously taken steps to limit loans to companies that are not net exporters as part of its effort to flip the big current account deficit to a surplus.
