May 10 2018

Turkish state bank answers PM’s call and cuts mortgage rates

Turkish state bank Ziraat Bank has answered a call by Prime Minister Binali Yıldırım and begun a campaign of cheap mortgages in order to enliven the economy ahead of June 24 elections, opposition newspaper Cumhuriyet said.

The bank lowered interest rates on residential mortgages up to 500,000 liras ($116,900) for up to 10 years for to 0.98 percent monthly, from around 1.23 percent.

The economy is turning out to be the big issue in presidential and parliamentary elections on June 24 with inflation above 10 percent and the currency reaching record lows of more than 4 liras to the dollar.

The move came just days after Yıldırım called on banks to provide special offers to help revitalise the real estate sector and reduce the stock of housing.

It is expected, Cumhuriyet said, that other public banks will soon follow Ziraat’s lead.

Ziraat Bank is one of the prime assets in Turkey’s Wealth Fund, which was established in August 2016 in order to facilitate state borrowing.