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Turkey plans credit card restrictions after 160% surge

Credit card sales in Turkey rose 159% in 2023, while overall loan growth increased 54% Unsplash.com/Clay Banks
Credit card sales in Turkey rose 159% in 2023, while overall loan growth increased 54%

Restrictive measures are likely to be imposed on credit cards, which saw surging growth last year, the chairman of Turkey’s banks association said.

Credit card sales rose 159 percent in 2023, while overall loan growth increased 54 percent, the Daily Sabah newspaper reported, citing Alpaslan Çakar.

“It is evident that there is a need for regulation in this area. I believe there will be a regulation here to manage the credit cards’ inflation effect,” he added.

The potential measures related to credit cards include limits on instalments and credit limit controls.  

Çakar anticipated a final interest rate hike by the central bank this week, marking the onset of the easing cycle in the last quarter of 2024.

The Central Bank of the Republic of Türkiye has already lifted its key rate by 3,400 basis points (bps) since June 2023, including a hike of 250 bps to 42.5 percent in December 2023.

He projected an overall credit growth of 40 percent this year, with a slight uptick in non-performing loans due to monetary tightening.

The central bank is likely to raise its one-week repo rate by another 250 basis points to 45 percent, according to a Reuters poll.

Çakar expected inflation to continue rising until May before declining to 40-45 percent by year-end, surpassing the central bank’s estimate of 36 percent.

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