Turkey interest rates negative after inflation accelerates - columnist
Interest rates in Turkey have turned negative after inflation accelerated last month, according to Alaattin Aktaş, a columnist for financial daily Dünya.
Interest rates on lira savings offered by the nation’s banks vary between 8.9 percent and 10.39 percent, averaging out at 9.92 percent, net of taxes, Aktaş said on Thursday. Meanwhile, consumer price inflation has climbed to 10.6 percent from 8.6 percent in November, giving savers a negative real return, he said.
Turkey’s government has pressured banks to lower the interest rates they charge consumers and businesses for loans as it seeks to lift the economy out of a painful recession. That has forced banks to lower rates they pay on deposits - their main source of financing for lending.
Deposits at Turkish banks have risen to 856 billion liras ($149 billion) as of Nov. 22 from 759 billion liras in June. The increase has prompted some people to claim that deposit growth has been unaffected by the lower interest rates, but the increase is deceptive because it includes interest earned by bank customers, Aktaş said.
Meanwhile, dollar deposits have expanded to $176 billion from $169 billion in June, he said.