May 23 2018

Turkish Cyprus bans foreign currency personal loans

The Central Bank of the Turkish Republic of Northern Cyprus (TRNC) has banned public and private sector employees who do not receive their salaries in foreign currencies from taking out foreign currency loans in an attempt to limit the damage of the plummeting lira, independent news site T24 said.

The central bank also outlawed banks from providing 100 percent loans for certain purposes, especially the purchase of property or automobiles.

The new measures mean that the purchasers of vehicles can only borrow 75 percent of their total value, while those taking out mortgages may only borrow 80 percent of their property’s value.

The TRNC uses the Turkish lira as its official currency, and the lira’s value has fallen from 4.10 to the dollar at the start of May to a high of 4.92 to the dollar on Wednesday.