Selective credit and quantitative tightening steps from the CBRT

In order to support the efficient use of financial resources by the CBRT, it was decided to determine the growth limit for vehicle loans, which was 3 percent, as 2 percent. In addition, the monthly maximum interest rate applied to credit card cash usage and credit deposit accounts was increased to 2.89 percent. The new regulations of the Central Bank of the Republic of Turkey (CBRT) within the scope of selective credit and quantitative tightening steps were published in the Official Gazette and entered into force. Accordingly, export and investment loans and loans for earthquake zones were excluded from all credit limiting measures of the Central Bank. In order to complement the steps supporting the tightening process, it was decided to determine the monthly growth limit for TL commercial loans, which was 3 percent within the scope of securities facility according to credit growth, as 2.5 percent. Export, investment, agricultural and tradesman loans were excluded from this limitation. The application of securities facility according to interest rate was simplified in order to increase the functionality of the market mechanism. Accordingly, the first stage will be removed and the interest limit will be applied as a single stage in TL commercial loans, excluding export and investment loans. No change was made in consumer loans In order to support the efficient use of financial resources, it was decided to determine the growth limit for vehicle loans from 3 percent to 2 percent, while no change was made in consumer loans and the 3 percent limit would be maintained. Credit card cash usage interest is 2.89 percent In addition, within the scope of controlling inflation and balancing domestic demand, the monthly maximum interest rate applied to credit card cash usage and overdraft accounts was increased to 2.89 percent. The Communiqué on Maximum Interest Rates to be Applied to Credit Card Transactions was also published in the Official Gazette. The said rate was published on the official website of the Central Bank on July 25 and will be valid as of August 1, 2023. The default interest to be applied to credit cards became 2.13 percent. With the Communiqué, the calculation method of maximum credit card default interest rates was changed and increased. Nominal reference rates were increased in the new calculation. Thus, final interest rates were increased. On the other hand, the new rates will also be valid for the interests of Overdraft accounts. The ceiling will be implemented on August 1, but its application to old balances may not be until the end of August (since the contract change must be notified 30 days in advance). New cash withdrawals will be charged interest at the new ceiling. Access to financing made easier for exporters The Central Bank also announced the decisions it has taken to support exporters’ access to financing and increase export support. Accordingly, the daily limit of rediscount credits has been increased to 1.5 billion TL. Performance will be considered in rediscount credits It was decided to increase the SME share in rediscount credits and to take export growth performance into account in disbursements. The conditions for accessing rediscount credits have been simplified within the scope of the simplification process. The 30 percent additional export price sales condition in rediscount credit usage has been removed. Foreign exchange purchases within the scope of import payments have been exempted from the commitment not to purchase foreign exchange given during the rediscount credit term.