Macroprudential toolkit strengthened to support financial stability and strengthen monetary transmission mechanism, bank says
The Central Bank of Turkiye announced on Saturday that new macroprudential measures to address loan growth and the interest rates applied in commercial loans.
The move aims to support financial stability and strengthen the monetary transmission mechanism, the bank said in a statement, citing the recent increase in the spread between its policy rate and loan interest rate.
The lenders will have to maintain treasury bond depending on the coefficient on the interest rates in the commercial loans they will give.
“The reserve requirement maintenance being applied at a ratio of 20% will be replaced by maintenance of securities at 30% for banks to enhance the efficiency of the practice,”it said.
“For commercial loans, 20% of the loan amount to be extended at an annual compound interest rate 1.4 times higher than the CBRT-released annual compound reference rate,” read the statement.
If the loan interest rate is 1.8 times or more than the reference rate, the facility rate will be applied as 90%, it said.
On Thursday, the bank unexpectedly lowered its interest rate by 100 basis points to 13% from 14%.