Turkish Central Bank cuts interest rates for credit cards

A notice published in the Official Gazette on Friday said that maximum monthly interest rate for credit cards were decreased to 2.26 percent from 2.44 percent for Turkish lira transactions.

The notice said that banks would not implement a higher interest rate than the ones set by the Central Bank as of January 1, 2011. Maximum interest rates which would be valid for the three-month period after March 1, 2011 would be made public by the Central Bank, it said.

Monthly overdue interest rate was dropped to 2.76 percent, it said. The reserve requirement declines to 7 percent for deposits with a term of one to six months, 6 percent for those up to a year and 5 percent for longer than a year, while it was set at 8 percent for liabilities other than deposits. The ratio was previously 6 percent for all lira liabilities.

The bank also increased minimum monthly payments on credit cards to between 25 percent and 40 percent of outstanding debt from a previous 20 percent, and reduced the interest rates and penalties that banks can charge.