Apr 06 2019

Turkish central bank decreases credit card interest rates

Turkish Central Bank announced on Friday that it had decreased the monthly maximum contractual interest rate for the credit card borrowings to 2.15 percent for the Turkish lira.

The bank revised the monthly maximum contractual interest rate for the credit card borrowings as  1.72 percent for foreign exchange transactions. It also set the monthly maximum overdue interest rate as 2.65 percent for the Turkish lira and 2.22 percent for foreign exchange transactions

The changes will be effective as of Apr. 1, the bank said. 

The monthly maximum contractual interest rate for the credit card borrowings was previously set in the last quarter of 2018 as 2.25 percent for the Turkish lira and 1.80 percent for foreign exchange transactions, while the monthly maximum overdue interest rate was announced as 2.75 percent for the Turkish lira and 2.30 for foreign exchange transactions.

The Turkish authorities are seeking ways to reverse a slump in economic activity, brought about by an overheating economy and a currency crisis that peaked in August.

Turkey’s banking regulator in February made it easier for Turks to buy items such as computers and holidays on their credit cards by extending the period for instalments to 12 months from a previous nine.

Other steps the Turkish government has taken include restructuring credit card debt and other loans, as well as tax breaks and measures to fight inflation, which is running at just below 20 percent.