Turkish President Recep Tayyip Erdoğan issued a decree instructing the state-run Halkbank to delay interest payments on loans provided to small businessmen and craftsmen.
The decision, published in the Official Gazette on Thursday, applies to arrears on low interest rate loans granted before Dec. 31 and will be implemented for the period between Jan. 1 and June 30, Dünya newspaper reported.
Interest payments will be spread evenly over the remaining instalments of the loans and businesses can apply for new low interest rate credits to replace them, Erdoğan said. Companies must refrain from laying off staff to qualify, he said.
Halkbank is controlled by Turkey’s sovereign wealth fund, which is chaired by Erdoğan.
Turkish state-run banks lent tens of billions of liras to businesses and consumers last year at below market interest rates, helping to spark a borrowing boom. The lending splurge led to an increase in demand for imports, widening the country’s current account deficit and sparking losses for the lira.