After the increase rate in consumer loans exceeded 30 percent by the end of January, a reserve requirement is expected to limit this increase in order to observe inflation, imports and therefore the current account deficit.
Two sources informing Reuters stated that this arrangement was evaluated through the system that relates the Central Bank’s required reserves (ZK) to TL credit growth.
MEASURE OF THE MACROIHATIY
Both sources described the regulation as “macroprudential precaution,” and said it would be careful not to limit economic growth.
One source said, “Growth in consumer loans is 34 percent based on current data, but when we look at banks’ requests, pending transactions and trends, this credit growth is moving towards 50 percent due to base effect. It is envisaged to take a precaution considering the current account deficit, inflation and trade balance. ”
TO DECREASE THE TARGET IMPORT REQUEST
CBRT did not comment on the subject.
The new system, in which credit growth was promoted with low rates of ZK and higher interest, was put into operation by the CBRT in August last year.
The system was then switched from the consumer price index to the calculation in calculating credit growth. It has also been updated to encourage long-term commercial loans and housing loans.
The last change of the CBRT was the use of the system for FX currencies.
Consumer loans are among the factors that increase consumption, and since some of the increase in consumption creates import demand, it may reflect negatively on the current account deficit. At the same time, the strengthening of domestic demand is among the factors that increase inflation.