Turkish state-run banks cut interest rates on loans

Turkish state-run banks Halkbank and Ziraat Bank reduced interest rates on loans after the central bank cut its benchmark rate last week, Sabah newspaper reported.

Both banks reduced interest rates on so-called cash loans to 1.25 percent per month for clients who pay their wages into their bank accounts. Sabah said citing decisions by the institutions. The newspaper didn't say what the loan rates were previously.

Turkey’s central bank cut interest rates by 325 basis points to 16.5 percent last week, following up on a 425 basis-point reduction in July. State-run banks reacted to the July ruling, slashing their rates in a government-induced programme to kick-start economic growth.

Halkbank and Ziraat Bank are controlled by Turkey’s sovereign wealth fund, which is chaired by President Recep Tayyip Erdoğan.

Sabah and other pro-government media outlets have published articles almost daily that detail interest rate reductions by banks and that expose other companies who fail to reduce loan costs.