The 30 percent interest rate threshold has been passed.

In the first half of 2023, the reward-penalty system introduced by the Central Bank, which increased the target of raising the lira on deposits to 60 percent, put banks in the race for deposits. Finally, at the beginning of the week, the CBRT readjusted the mandatory reserve ratio for TL deposits of more than three months and for foreign currency liabilities of more than six months obtained abroad until the end of the year. Speaking to Reuters, the bankers said that after this decision, there was a 1-2 percentage point increase in deposit rates across the sector, while deposit interest rates approached 30 percent e they even exceeded this rate in some campaigns.

“KEEP HALF IN KKM”

In addition, the trend of TL 95 billion in the past three weeks to run out of Currency Protected Deposit (KKM) accounts threatens the artificial stability established by the economic administration in foreign exchange. In fact, the fact that the price of the dollar exceeds 19 lira in the Grand Bazaar indicates that the demand for foreign currency has begun to increase.

At the meeting where banks and the management of the Central Bank met last week, it was learned that a study would be carried out to make the Protected Deposit in Currency product more attractive in a model that appeals to both the CBRT and the banks. According to information obtained from banking experts, banks have started paying 32-34 percent interest on 92-day TL deposits, as long as half of them are held in KKM. Weekly data from the Banking Supervision and Regulation Agency (BDDK) to be released today will show whether KKM’s exit continues in the week ending January 13. According to the January 6 data announced last week, KKM’s volume decreased to 1.37 billion lira.

MB commercial loan warning to banks

The Central Bank (MB) sent a new warning letter to the banks. In the letter, MB called on banks to end practices that indirectly increase commercial lending costs by circumventing regulations.

In the article seen by Reuters, “In the audit activities carried out, it has been determined that there are practices that increase the costs of commercial credit by indirectly exceeding regulations. It has been determined that a commission is charged under the heading ‘Restructuring Commission, Extension/Payment Plan and Interest Rate Change’, for which there is currently no maximum limit, especially for the granting of commercial loans at short terms by some banks