(Bloomberg) -- Turkey’s banking regulator agreed to revise a rule aimed at compelling lenders to boost credit at a meeting with the industry’s top executives.
A revision to the asset-ratio rule by the regulator would be in line with requests from the banks, the people said, who asked to speak on condition of anonymity. The central bank was present at the meeting held on Thursday night.
The asset-ratio rule was introduced earlier this year to push financial institutions to step up lending, purchase government bonds and engage in swap transactions with the central bank. The regulation allowed the government to fine banks who can’t maintain an asset ratio of at least 100%.
The revision could mark an end to Turkish authorities’ push for loan growth, the people said. The regulator, known as BDDK, declined to comment.
The decision comes after the lira tumbled to a record low against the dollar on Thursday even though the central bank had spent billions over the past year propping it up. A series of jumbo-sized interest rate cuts and a campaign to get credit flowing to the economy to support growth has pushed the nation’s current account into a deficit, while risking a fresh bout of inflation.
President Recep Tayyip Erdogan and Treasury and Finance Minister Berat Albayrak have repeatedly slammed private banks for failing to support companies even before the coronavirus outbreak paralyzed economic activity and curtailed the movement of people.