Posted by meb at February 27th, 2007

Speaking to the media, after the signing ceremony of $3 billion Turkcell syndication credit, CEOs of the two of the top 4 Turkish banks have said they expected a gradual decline in real interest rates in Turkey in a year or two.
Akbank CEO Zafer Kurtul has said they expected real interest rates to come down in such a economic and political stability sitution in Turkey.
Kurtul told reporters that real interest rates were high at present, considering annual inflation of the 2007 would end up somewhere between 6 to 7 percent.
Kurtul went on as, ‘Interest rates are at 19pct levels. For the benefit of industrial and commercial businesses, these rates should come down to much more acceptable levels. We think, there is political and economic stability in Turkey, at the moment. Turkish state budget reports a surplus in a long time. Many economic reforms have been made. A very significant distance has been taken in privatizations. High annual economic growth figures recorded in last 5 years.’
Zafer Kurtul said the declining trend in interest rates would continue this year, perhaps 17 pct Treasury bill rates at the end of the year.
Akbank CEO Kurtul also responded questions on the new system of mortgage credits, and commented that much lower interest rates are needed for the market to run well, and monthly 1 pct mortgage credit rates would not be possible this year, perhaps next year.
Garanti CEO Özen:
Interest rate is the strongest tool of Central Bank
Garanti Bankası CEO Ergun Özen also underlined the high level of real interest rates, but pointed to the deviation in annual inflation target of the Central Bank.
Özen stated that ‘Interest rate is the strongest monetary tool of the Central Bank, and therefore I do not expect a speedy fall in interest rates in the next one or two months.
CEO Ergun Özen commented that a right combination of inflation target and interest rates should be found.

source: The New Anatolian