Interest rate cut has not yet reflected in banks: No impact on the market

The Central Bank of the Republic of Turkey's (TCMB) interest rate cut has shown its effect on interest rates in the markets. In line with expectations, the TCMB lowered the policy rate by 250 basis points to 42.5 percent. With this step, there has been a total reduction of 750 basis points in interest rates over the last three months.

As a result of the interest rate cut, a rapid decline was observed in Turkish Lira deposit interest rates. While the 32-day Turkish Lira deposit interest rate was at the 50 percent level at the beginning of the year, it has now fallen to 40 percent. However, it is noteworthy that this cut is felt by banks only in deposit interest rates.

NO IMPACT

The TCMB's interest rate cut led to a 3-point decrease in Turkish Lira deposit interest rates. However, a similar decline did not occur in loan interest rates. The fact that consumer and commercial loan interest rates, in particular, did not decrease at the same rate has caused questioning in the markets.

While consumers continue to struggle due to high interest rates on financial products such as credit cards and personal loans, banks are reluctant to lower loan interest rates.

Real sector representatives are criticizing banks for not lowering loan interest rates. Union of Chambers and Commodity Exchanges of Turkey (TOBB) President Rifat Hisarcıklıoğlu stated, "What are banks waiting for to lower commercial loan interest rates?" expressing that banks need to take action regarding interest rate cuts.

TOBB Board Member and Ankara Chamber of Industry (ASO) President Seyit Ardıç also pointed out that the financing problem is deepening, stating that banks should lower commercial loan interest rates as soon as possible.

CITIZENS' HIGH INTEREST BURDEN ON LOANS CONTINUES

Credit card and overdraft account interest rates have remained unchanged for the last year. Due to high interest rates, citizens struggling with the cost of living are having difficulty paying their debts. The monthly late interest rate on credit cards is 5.05 percent, and it is 5.30 percent for overdraft accounts.

According to the Central Bank's weekly interest rate statistics, the average interest rate applied to overdraft accounts and personal loans for the week of February 28 was recorded at 71.41 percent. For commercial loans, the interest rate is at the 55.25 percent level.