The Turkish central bank announced Saturday new measures to curb credit card spending in a move aimed at additional tightening after it made adjustments on the monthly growth limit of loans earlier this month.
The Central Bank of the Republic of Türkiye (CBRT) raised the maximum interest rate on credit card cash withdrawals to 5% from 4.42%, according to a decision published in the country's Official Gazette.
The revisions, part of the bank's tightening steps, aims to curb access to cheaper credit card borrowing conditions than consumer credit. The increase will also be reflected in overdraft accounts.
The bank also separately raised monthly targets for lenders to increase the share of lira deposits, Anadolu Agency (AA) reported.
With the move, the central bank effectively revised upward the Turkish lira share in the banking system, bankers said.
They said the bank, for the first time, introduced a monthly increase target for the share of Turkish lira in the deposits of corporates in the banking system.
The revisions will come into effect on March 16, the bank said.
The latest moves comes after the central bank initiated earlier in March steps to curb lending and discourage banks' demand for foreign currency as part of an effort to cool inflation that hit 67% last month.
The monetary authority held the key interest rate steady at 45% last month after months of aggressive tightening. It however said, the stance would "be tightened in case a significant and persistent deterioration in inflation outlook is anticipated."
After winning reelection last May, President Recep Tayyip Erdoğan installed a new economy administration that abandoned years of easing policy in favor of tightening.
An aggressive eight-month policy-tightening cycle since June raised the central bank's main interest rate by 3,650 basis points to 45%.
The bank is scheduled to announce its latest decision on interest rates on March 21. Most economists expect the bank to keep the rate unchanged at this week’s rate-setting meeting.
