Turkish Finance Minister briefs banking sector on new business model


ISTANBUL, Dec 18 (Reuters) – Turkish Finance Minister Nureddin Nebati has briefed the country’s banking association, banking watchdog BDDK and state bank officials on the government’s new low-rate business model , the association said on Saturday, after the pound hit a record high. low.

The lira fell past 17 against the U.S. dollar on Friday after fears of an inflationary spiral mounted, sparked by President Tayyip Erdogan’s policy on soaring prices. Read more

In a statement, the banking association said the objective of the meeting was to discuss “healthy and steady growth”, adding that the evolution of the banking sector, as well as the national and global economy, had been evaluated.

Join now for FREE unlimited access to Reuters.com


“Our banks will continue to use their resources to meet the financial needs of households and the real economy, within the framework of the free market mechanism that works with its rules,” he said.

Despite criticism from economists and opposition lawmakers, Erdogan pushed for monetary easing to boost credit, exports and growth ahead of the 2023 election, causing the lira to lose 55% of its value against to the dollar this year, including almost 40% in the last month alone.

The sharp depreciation has caused the lira equivalent value of foreign currency loans to soar, putting pressure on banks’ capital adequacy ratios (CARs), which are measured in local currency.

Reuters reported on Friday that Turkish authorities were working on possible relief measures for banks caught between the currency crash and capital requirements, including a possible injection of capital for state-owned banks. Read more

Earlier on Saturday, Turkey’s largest business group, TUSIAD, called on the government to abandon the current monetary policy, calling for a return to the “rules of economic science”. Read more

Join now for FREE unlimited access to Reuters.com


Reporting by Ebru Tuncay; Written by Tuvan Gumrukcu; Editing by Timothy Heritage and David Holmes

Our standards: The Thomson Reuters Trust Principles.


Comments are closed.