Turkish loans contract sharply after currency crisis

Turkish banks’ lending has contracted sharply since a currency crisis wreaked havoc in the economy in August.

The total loan book of the nation’s banks has shrunk by 7.6 percent in three months to 2.48 trillion liras ($459 billion) as of Nov. 9, Dunya newspaper reported on Thursday, citing figures provided by the banking watchdog in Ankara.

Deposits held by banks have also declined by 6.6 percent to 2.17 trillion liras, the newspaper said.

The Turkish lira slumped to a record low of 7.22 per dollar in August. Although it has recovered somewhat to trade at 5.4 per dollar this week, it is still down by about a third this year. The losses contributed to higher inflation in the country -- the inflation rate has surged to 25.2 percent, a 15-year-high -- pushing up interest rates on loans.