After tightening with macroprudential measures on TL commercial loans, average interest rates, excluding KMH and commercial credit cards, reached their highest level since May 24, 2019 at 28.01% last week. While commercial loan interest rates have hit their highest level in recent years, consumer loan rates have continued to stay above 30 percent even though they declined slightly over the past week. The 13-week annualized increase is about 45% for commercial loans, 65% for consumer loans and about 50% for total loans. As demand for commercial loans slows, demand for consumer loans is accelerating.
According to Central Bank data, the interest rate applied by banks to TL-based commercial loans increased by 26 basis points to 27.35% in the week of June 24 compared to the previous week. Excluding commercial overdraft accounts and commercial credit cards, interest rates on TL commercial loans increased 15 basis points to 28.01%. TL-based home loan rates fell 6 basis points to 18.24%, auto loan rates fell 97 basis points to 24.72%, and consumer loan rates fell 116 basis points to 30. , 66%. The dollar commercial loan interest rate fell 95 basis points to 6.59% in the same week, while the euro commercial loan interest rate fell 12 basis points to 5.09%.
Tightening with macroprudential measures
In the second week of June, with the depreciation of TL gaining momentum, the Central Bank, especially the Treasury and Finance Department, and the BRSA 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 setting additional provisions denominated in TL. The required reserve ratio in commercial loans has been doubled, the BITT has been increased in all loans and the maturities of consumer loans have been reduced. Last week, a limitation was imposed on companies’ foreign currency assets for the use of TL loans. After the BRSA decision on Friday, the first day of last week, banks temporarily suspended commercial lending. Bank sources have said that revolving commercial lending rates will also increase, which have already reached 50%.
While all of these moves have created a squeeze on the market, lending and deposit rates have also changed direction upwards. While consumer lending rates rose in the first week, accompanying commercial lending rates, last week there was a slight decline. However, interest rates on consumer loans remained on average at 27.11%, while interest rates on consumer loans remained at 30%.
There is a slowdown in the increase in BKM
As the steps taken raise interest rates on loans, the step taken by the Central Bank on Thursday last week encourages banks to reduce their foreign currency deposits. The Central Bank raised the 1.5% commission rate on bank reserve requirements and FX currency deposit accounts to 5%. While this situation increases the cost of banks, financial experts have commented that the banking industry’s insistence on directing its customers to currency-protected TL deposits will increase. According to BRSA data, the volume of KKM has increased to 1 trillion 18 billion 197 million lire. However, the rate of increase of the KKM has slowed significantly. KKM, whose weekly increases hit double-digit numbers with the participation of legal entities in February and early April, increased by 2.63% last week.