Turkish central bank raises credit card cash withdrawal rates

Turkey’s central bank on Saturday raised the maximum interest rate on credit card cash withdrawals to 5% from 4.42%, according to a decision published in the Official Gazette, in a move aimed at additional tightening.

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.

“Credit card cash withdrawal costs are being increased to deterrent levels. A step in the right direction, albeit late,” said Hakan Kara, a former central bank chief economist who is at Bilkent University.

With the move, the central bank effectively revised upwards 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. [Reuters]