Turkish Treasury and Finance Minister Nureddin Nebati will meet with bankers in the coming days to explain the government’s low interest rate policy and economic programme, and to get their views, the Yeni Şafak newspaper reported on Tuesday.
Nebati, who participated in a five-hour meeting with President Recep Tayyip Erdoğan and the heads of the central bank and state-run banks Halkbank and Vakıfbank on Monday, will reiterate the government’s commitment to low interest rates and outline its expectations from the sector, Yeni Şafak said.
Erdoğan hastily called Monday’s meeting after the lira slumped to fresh record lows against the dollar. The currency slid on concerns about Turkey’s commitment to cutting interest rates despite accelerating inflation.
The minister will focus on the difference between interest rates offered by banks on deposits and consumer loans during the talks. He will call on bankers to close that gap to help stimulate activity in the real sector, the newspaper said.
Yeni Şafak said Nebati will also stress that Turkey’s economic programme is aimed at a low current account deficit and high economic growth.
The weighted average interest rate on consumer loans in Turkey stood at 23 percent in the week to Dec. 3 compared with 14.6 percent on deposits of up to one month maturity, according to central bank data.
Inflation in Turkey accelerated to 21.3 percent in November. The central bank has cut its benchmark interest rate to 15 percent from 19 percent since September. It meets again on interest rates on Thursday, when economists expect another reduction of 1 percentage point.
The lira was trading down 2.6 percent at 14.15 per dollar as of 9:35 a.m. local time on Tuesday. It hit a record low of 14.66 per dollar on Monday, prompting the central bank to intervene in the market to sell foreign currency.