Turkey’s banking regulator could further restrict consumer borrowing as it tries to control high levels of inflation, potentially squeezing margins at the country’s privately owned banks, S&P Global said in a report.
Lower limits on credit cards and personal loans are possibilities, as are increased risk-weighted asset requirements for general purpose loans and auto loans, according to Sevgi Onur, vice president and banking analyst at investment company Seker Invest. The Banking Regulation and Supervision Authority cut the maximum tenor for personal loans of more than TRY 50,000 in late September.
“It’s highly likely we’ll see some of these measures,” Onur said. “Worries about inflation, which is stubbornly high, and the current account deficit could force the regulator to act.”
The central bank has more than doubled interest rates since May 2020 to 18% as it unwinds pandemic support measures and grapples with inflation that hit 19.58% in September. The country’s target rate is just 5%.