Interest rates on deposits down to three-year low
Average interest rates on deposits in the Turkish banking industry have been falling since the second half of 2019 and hit 9.6 percent, which marked a three-year low, state-run Anadolu Agency reported.
The country's Central Bank delivered a significant 1,275 basis point cut since July 2019, slashing its benchmark one week-repo rate from 24 percent to 11.15 percent.
Interest rates for deposits, which averaged at around 23 percent in June last year, have gradually come down below 10 percent in 2020. As of Jan. 17, those rates were 9.6 percent.
Interest rates for up to one-month, three-month and six-month deposits stood at 9.21 percent, 10.33 percent and 9.25 percent, respectively. As for up to one-year and more than one year deposits, interest rates were 9.54 percent and 9.65 percent.
Data from the Banking Regulation and Supervision Agency (BDDK) showed that deposits collected by local banks rose 1 percent on a weekly basis to stand at 2.57 trillion Turkish Liras (around $153 billion) as of Jan. 17.
Interest payments for deposits amounted to 164 billion liras in January-November last year, up from 134 billion liras in the same period of 2018, the BDDK data also showed.
The combined profit of Turkish lenders totaled some 46.6 billion liras in the first 11 months of 2019, the banking regulator reported in December.
More decline on the way
Analysts expect the decline in interest rates for deposits to continue in the months to come in line with the decreases in inflation and the Central Bank's policy rates.
The annual interest rate stood at 11.84 percent in 2018. However, Central Bank governor Murat Uysal recently said that he expected inflation to fall to single digits by the middle of this...
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