The Central Bank in Northern Cyprus cut Turkish lira rates by 200 basis points

The Central Bank of the Turkish Republic of Northern Cyprus (KKTC Merkez Bankası) announced a reduction of the annual interest rate applied to deposits in Turkish lira on its accounts from 38.00% to 36.00%. The decision came into effect on September 18.

Previously, on July 29, the regulator had already lowered the rate from 43.00% to 38.00%. No changes are planned for foreign currency deposits. The rate on advances secured in foreign currency was reduced from 46.00% to 43.50%.

The Central Bank of Northern Cyprus also revised rates on rediscount operations. The discount rate on bills in Turkish lira was lowered from 46.00% to 43.50%. For bills issued in the sectors of industry, export, tourism, education, and agriculture, the rate was reduced from 39.50% to 38.00%. The rate for bills of small entrepreneurs was changed from 37.50% to 36.00%.

The new rates are effective from September 18. Following this move, the industry's attention is focused on the possibility of lowering deposit and loan rates in commercial banks. Context: The Central Bank of Turkey (TCMB) reduced its key rate by 250 basis points on September 11 — from 43.00% to 40.50%.