According to data from the week of June 10, the Central Bank’s efforts to both raise market rates and control credit growth with consecutive macroprudential measures by keeping the policy rate at low levels do not appear to have been very successful according to the data for the week of June 10. According to Central Bank data, excluding interest on real estate loans, especially interest on commercial loans, all interest rates on loans increased in the week of June 10 from the previous week. While the consumer loan interest rate peaked at 4 months at 30.65 percent, vehicle loan interest rates were at their highest level since late April at 25.03 percent. Interest on commercial loans, on the other hand, rose to the second highest level of the year with 24.71%.
In the second week of June, with the depreciation of TL gaining momentum, the Treasury and Finance Ministry, the Central Bank and the Banking Regulatory and Supervision Agency (BDDK) took new steps. In order to ensure financial stability, the economic management has taken measures to encourage TL activities and discourage foreign currency activities by providing additional provisions denominated in TL. In addition, the compulsory reserve ratio for commercial loans was doubled and the tax on banking and insurance transactions was increased. Loan maturities have also been reduced.
Deposit rates are also on the rise
All of these moves have caused both lending and deposit rates to rise. Banks’ TL deposit rates increased 29 basis points to 16.08% on average in the week of June 10 from the previous week, while the dollar deposit interest rate increased 2 basis points to 1.61 % and the interest rate on euro deposits rose 18 basis points to 0.87 percent, rose to.
Interest rates on bank deposits even exceed 23% depending on the size. Although interest on commercial loans reached the second highest level of the year on average, interest rates on revolving loans were based on 50%.
High inflation hits
While loan interest rates are so high, loan growth rates don’t lose momentum. Total loan growth, adjusted for exchange rate effects, grew 31% in the week of June 10 and has continued to rise steadily since the beginning of this year. In the week of June 10, the growth of consumer loans increased by 27.1% and that of commercial loans by 28.3%, net of exchange rate effects. The data reveals that neither the growth rate of commercial loans nor that of consumer loans has slowed despite the macroprudential measures adopted.
The rise in both loan interest rates and loan growth rates is happening simultaneously. Analysts said that while banks’ credit costs have risen and access to credit becomes more difficult, the need for working capital in a high inflation environment is preventing the growth rate of commercial loans from slowing. Likewise, the effect of high inflation on consumer loan growth is substantial. Consumers, whose purchasing power has dropped significantly, continue to increase their demand for loans despite high interest rates.
When the commercial loan growth rate is analyzed in annualized terms over 13 weeks and adjusted for the exchange rate, it is seen that there was a 49.9 percent increase on June 10th. Achieving its highest growth rate of the year of 56 percent in the week of April 29, the 13-week annualized growth rate adjusted for exchange rate effect regressed to a weekly increase of 47.1 percent. after the subsequent macroprudential measures. However, with the first week of June, the direction returned to the upside. Total loan growth, on the other hand, increased to 56.3% in the week of June 10, on an annualized 13-week basis and adjusted for exchange rate effects. This indicates the fastest week of the year in terms of total loan growth.
Public banks outperformed the private sector growth rate for the first time this year
Equality was again achieved in the growth of loans in public and private banks. Since the beginning of this year, public banks have lagged behind private banks in loan growth. The 13-week annualized rate of growth in public bank lending, adjusted for exchange rate effects, was 56.8% as of June 10. In private banks it was calculated as 55.8%. Public banks outperformed private banks in terms of growth rate for the first time this year. There was a weekly growth in loans of more than 61 percent in private banks at the end of April. At that time, the growth rate of loans in public banks was around 45%. Commercial loans in public banks grew by 53.3%, excluding corporate credit cards, while consumer loans increased by 60.2% in unadjusted terms. In private banks, consumer loans grew by 60.8%, while commercial loans grew by 46.9%, annualized for 13 weeks and adjusted for exchange rate effects. Public banks diverged from private banks in commercial lending growth during the week of June 10th.