According to the Bloomberg news; The central bank has taken a move to target heavy household demand for gold and is seeking to discourage cash withdrawals using credit cards in its first measures since Sunday's election. According to this;
· With the regulation that came into force today, banks' credit card limit is over 50 thousand liras, making them obligated to purchase government bonds at 30% of their gold and jewelery purchases.
· A separate measure penalizes banks for cash withdrawals from customers using credit cards. Banks will have to purchase government bonds equivalent to 30% of their cash withdrawals.
Under its unorthodox monetary policy framework, the central bank requires banks to buy low-yield government bonds to manage the loan supply. Recently, cardholders have started to use cash withdrawal as a cheaper alternative to using loans in terms of investment/arbitrage opportunities. The central bank sets an upper limit on how much banks can charge for cash withdrawals using credit cards, while also limiting interest rates for overdue card payments. The banking sector had already applied low cash advance limits on high-limit credit cards, so there was a certain brake. Therefore, the net effect will be negative, but there will be no additional effects. The main purpose here is to prevent the demand for foreign currency and gold via credit cards.
Monthly, Securities, Banking Sector (Thousand TL) (Monthly)… Source: CBRT, BRSA, Dinamik Yatırım
The demand for foreign currency still continues. On the other hand, with the clear difference between the market rate and the CBRT rate before the election, a structure similar to the bilateral exchange rate system emerged. In other words, while the interbank rate is currently applied for the exchange in the bank, a very different exchange rate comes into play in market transactions, which has become this different market rate, which is also essential for the real sector and individuals. It is understood that the struggle of the Central Bank in the field of demand for foreign currency and gold will again be through regulations.
Kaynak Enver Erkan / Dinamik Yatırım
