Turkey’s banking regulator confirms strength of banking sector

As failed coalition talks put pressure on Turkish lira, banking sector is not vulnerable, says Turkey’s Banking Regulation and Supervision Agency (BDDK) Chairman Mehmet Ali Akben

Photo by: Reuters
Photo by: Reuters


The Turkish banking watchdog, the Banking Regulation and Supervision Agency (BDDK) said on Wednesday that the Turkish banking sector is solid.

In an interview with Anadolu Agency, BDDK Chairman Mehmet Ali Akben said that Turkish banks are not vulnerable to the effects of the depreciation of the Turkish lira, which hit a historic low of about 2.90 on Tuesday afternoon.

On the contrary, the Turkish banking market is expanding, Akben pointed out.

"Some small banks in Turkey want to grow by making domestic acquisitions," Akben said.

"Meanwhile, banks from some countries that have not yet entered our market are working on this and some seriously want to enter. When they meet the conditions, we are ready to open our market to them," Akben said.

Additionally, Turkish President Recep Tayyip Erdogan’s key advisor Cemil Ertem commented on the weakening lira in a separate interview with Anadolu Agency. Ertem said a rise in the exchange rate does not portend a crisis in Turkey.

Cemil Ertem's remarks came a day after the Turkish lira hit a new low against the dollar after the Turkish central bank announced that it was holding interest rates at current levels.

"The central bank also did not interpret the rise of the rate as for the long-term, nor as a sign of crisis," Ertem told Anadolu Agency.

"What is important here is that the central bank also affirmed that it sees Turkey's economy as strong in this manner. We also see the Turkish economy as strong. There is no sign of crisis in Turkey [now], nor in the near future," said Ertem.

The currency fell to a historic low of about 2.90 against the dollar after the central bank's rate decision on Tuesday.

The Turkish lira has slid to a series of record lows against the dollar in the past week after coalition talks between the country’s main parties ended without an agreement.

The Turkish central bank has not changed the current interest rates of 7.50 for the one-week repo, and 10.25 percent for the overnight lending rate since May.