Turkish Banks Restrict Loans and Increase Interest Rates Ahead of Presidential Runoff

Shafaq News/ Following the recent presidential election in Turkey and anticipating the upcoming runoff, Turkish banks have reportedly reduced lending to individuals and postponed decisions regarding company loans. These actions are in response to new regulations imposed by the central bank since the inconclusive election on Sunday.

According to bankers, some Turkish banks have raised the interest rates on monthly mortgage loans to over 3%, while car loan interest rates have reached 4%. Additionally, the monthly interest rates for personal loans exceeding 70,000 pounds ($3,590) have approached 5% since implementing the new regulations.

It is worth noting that lending at these higher interest rates is now limited, with banks only providing loans when necessary.

Investors have expressed concerns about President Recep Tayyip Erdogan's potential victory in the runoff election, as his unorthodox economic policies, which prompted the central bank to lower interest rates despite high inflation rates last year, have contributed to a cost-of-living crisis for many Turks.

President Erdogan is considered the favorite to win the runoff election, which would extend his two-decade rule for another five years. His ruling Justice and Development Party, along with its nationalist and Islamist partners, also secured a parliamentary majority in the recent elections.