Credit interest rates in Turkey skyrocket after Central Bank moves
Turkey's Central Bank's maneuvers have initiated a significant shift in the credit interest rates, doubling, and even tripling in some cases, leading to repercussions in various sectors of the economy, Turkish Milliyet newspaper reported on Saturday.
The rate adjustments have made a considerable impact, prompting concern and speculation amongst investors and the general public.
Prior to the recent adjustments, personal loan interest rates were hovering around the 30% mark. However, recent data has revealed an alarming surge to 60%. The last three months have witnessed a similar trend in other types of loans as well.
According to reports by Milliyet, the vehicular loan interest rate jumped from the 20% range to a staggering 46%, while housing loan interests saw a spike from 16% to 38%. Furthermore, commercial loan interest rates escalated from 14% to 40%, indicating an overall tightening financial landscape in the country.
In more detailed numbers, last week, the average interest rate for personal loans increased by about 7 points, reaching 59.71%. This bi-weekly rise has exceeded 13 points, effectively doubling the interest rates from what they were four months ago. The Central Bank's moves have been observed with a growing concern as the rates before the elections were considerably lower, with personal loan interest rates standing at 30%.
Moreover, the average vehicular loan interest rate also experienced an approximately 10-point rise last week, culminating at 46.46%. Before the upcoming elections, these rates were a modest 20%, showing more than a two-fold increase. The housing loan interest rates weren't spared either, escalating from a relatively low limit of 16% to a daunting 38.85% last week. Coupled with the elections, the average commercial loan interest rates have reached a significant peak of 40.87%, tripling compared to pre-election levels.