Another Interest rate cut

[angryumpire]

Turkish Interest Rates Slashed to 11.5 Percent
Friday, 20 February 2009
In a surprise move the Turkish Central Bank cuts interest rates by 1.5 percent amid growing evidence of a deepening financial recession in Turkey.



The Turkish Central Bank is following a similar policy to those in Europe and the US as it tries to minimise the effects of the global economic recession that are accelerating in Turkey.

Recent figures show that the Turkish ‘official’ unemployment rate has risen to just over 12% (double that of the UK's 6%), car production is down 60% and overall industrial production down nearly 18%.

Bad News for Savers

The central bank has reduced interest rates by 5.25 percent since September 2008.

The average Turkish Lira saver will now receive a real return of just 0.28% after the government deducts its 15% tax on interest and inflation of 9.5% is taken into account.

The British Pound rose slightly against the Turkish Lira after the news to 2.42 TL to the GBP.

Financial Stimulus Package

Meanwhile the Turkish government announced a financial stimulus package on Wednesday involving tax cuts on internet costs and car purchase taxes for cars of 30 years and older, loans to exporters and possible tax holidays for certain manufacturing businesses in the hope of halting the recent increases in unemployment.

The internet tax cuts will see the special communication tax of 15% on internet bills reduce to 5%. This should reduce the average 30 TL bill by around 2 TL per month (4 loaves of standard bread!).

I don't understand the reduction in car purchase taxes for cars of 30 years and older, could be lost in the translation.

[angryumpire]

Interest Rates Cut Again
Friday, 20 March 2009
The Turkish Central Bank is following a similar policy to those in Europe and the US as it tries to minimise the effects of the global economic recession that are accelerating in Turkey.

Yesterday it cut interest rates by 1 percent bringing the rate for savers down from 11.5 percent to a record low of 10.5 percent.

Mixed News for Savers

The central bank has reduced interest rates by a total of 6.25 percent since September 2008 in consecutive cuts.

Luckily for savers the rate of inflation has eased to 7.7% meaning savers will just scrape a real rate of return of 1.2% after tax and inflation are taken into account.

However, for all those people “living off the interest” times are now getting tougher.

In September last year it took 126,000 TL to raise 1,500 TL per month interest. Now it takes 202,000 TL.

Or to put it another way, 107,000 TL now only makes on 795 TL per month after tax – a 47% reduction in income.

Lira Weakens

The British Pound rose against the Turkish Lira after the news to 2.48 TL to the GBP. Earlier in the day it stood at around 2.39 TL.

[angryumpire]

The Central Bank, today, reduced the interest rate by 0.75%, the seventh consecutive drop. This brings the rate down to single figures, 9.75%.

Take the Tax and Inflation into account and its almost a break even figure on your TL Deposit Account.

Oops!!!!!

[angryumpire]

Interest Rates Cut Again

The Turkish Central Bank cut interest rates by another half a percent yesterday, down to 9.25%.

Rates have reduced by 7.5 percent over the last seven months.


The latest cut will be another blow for savers who rely on their savings interest to meet day to day living expenses.

But the good news for Turkish savers is that they are still getting a positive return on their money after inflation unlike the UK, but only just, with inflation running at just over 6%.

[angryumpire]

Interest Rates Cut Again

The Turkish Central Bank cut interest rates by another half a percent yesterday, down to 8.75%.

Rates have reduced by 8% over the last 8 months.


The latest cut will be another blow for savers who rely on their savings interest to meet day to day living expenses.

But the good news for Turkish savers is that they are still getting a positive return on their money after inflation unlike the UK, but only just, with inflation running at just over 5%.

[angryumpire]

Bank Lowers Interest Rates to 8.25 Percent

The Turkish Central Bank lowered interest rates for the ninth consecutive month on Thursday to 8.25 percent as part of its economic stimulus programme.

The latest economic figures show output is down and that the gross domestic product, one measure of the wealth of the country, fell by double digits in the first three months of the year.

The bank has not ruled out further cuts and economic commentators believe another half a percent cut could follow as soon as next month.

This crisis could be a blessing in disguise for the Turkish economy moving it to a low inflation and low interest economy.

But of course this is bad news for savers.

After tax at 15% most savers will receive just 7.1% interest per year. But after inflation of 5.9% is taken into account the real return will be only 1.1%.

[angryumpire]

Interest Rates Cut to Record Low

The Turkish Central Bank cut base rates to a record low of 7.75% yesterday.

The bank has cut interest rates by 9% in the last ten months the largest of all of the G20 economies.

Further cuts in interest rates are not ruled out.

With interest rates at this level, tax on the interest at 15% and inflation running at around 6.5%, then your 30 day Deposit Accounts are making zero to negative gains. This causes huge problems to people who rely on the Interest for living expenses.

You might as well put your money under the mattress.

[angryumpire]

Definitely put your money under the mattress, the Central Bank has reduced the interest rate to 7.25%, an historic lowest rate ever, with further rate reductions forecast in the future.

[angryumpire]

The Central Bank further reduced interest rates yesterday by .5% down to 6.75% an historic low.With tax on interest at 15% and inflation just below 6%, you really are in negative territory on your investment if you have a Lira deposit account.

Also, the Government are running a deficit on income of 40.81 billion TL from Jan. to Sept., so get ready for Tax Increases in the not too distant future.

As only 50% of Turks pay tax, they have got to find the money from somewhere.

[angryumpire]

A further quarter percent was knocked off the base deposit rate on Thursday bringing the interest rate to an all time low of 6.5 percent.

The bank has cut rates by 9.75 percent in the last 12 months leading some economists to suggest that the central bank may be ‘over doing it’ because international investors in the Turkish Lira are cautious and real interest rates are very low.

Savers hit.
The latest cut will come as more bad news for people relying on interest to support their income.

After tax of 15% is deducted by the government from the rate of 6.5 percent savers will receive just 5.52 percent interest per year.

But after inflation of 5.08 percent is taken into account the real return will be only 0.44 percent.