Turkey will act if banks do not curb deposit rates: AKP deputy chair

ANKARA-Reuters

The Turkish government will use the necessary tools at its disposal if banks to not curb rises in deposit rates, ruling Justice and Development Party Deputy Chairman Cevdet Yılmaz told Reuters on July 6.

Yılmaz, the AKP’s deputy chairman responsible for economic affairs, said the rise in deposit rates was damaging to everyone and added they should be brought to a reasonable level.

“The primary expectation in this regard is for the actors in the banking system to realize this and take a position accordingly,” Yılmaz told Reuters.

“However, if this doesn’t happen, the government has certain tools at its disposal and it will not refrain from using them for the benefit of the entire system. The rise in interest rates brings the whole economy down and will hinder the banking system at some point,” he said.

Data from the Turkish central bank showed that the short-term deposit rates in the form of Turkish Lira rose from 8.76 percent at the end of 2016 to 10.66 percent by May 2017.

Officials told Reuters on July 7 that Deputy Prime Minister Nurettin Canikli would chair a meeting with representatives from Turkey’s banking watchdog, banking association and participation banks association to discuss deposit rates.