Turkey's Central Bank Squeezes Credit Growth Limits

Turkey's Central Bank (TCMB) has tightened credit conditions by lowering growth limits on various loan types. The move, effective May 23, aims to curb rapid credit expansion and reinforce financial stability. The central bank announced new, lower limits for the upcoming eight-week calculation period.

Specifically, the growth limit for consumer loans and vehicle loans provided to consumers has been reduced from 4% to 3%. For credit-linked deposit accounts, the growth limit has been lowered from 2% to 1%. These adjustments are intended to exert tighter control over the expansion of credit limits offered to consumers.

Commercial credits also face new restrictions. The growth limit for Turkish lira loans extended to SMEs has been decreased from 5% to 4.5%. For Turkish lira loans to businesses outside the SME category, the growth limit has been cut from 3% to 2%. The TCMB stated that these steps are designed to support a strict monetary policy and bolster macrofinancial stability.

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The steps taken are aimed at supporting a tight monetary stance and strengthening macrofinancial stability.