Turkey’s Banking Regulation and Supervision Agency (BDDK) announced on Thursday that financial institutions have been instructed ‘to control undue transactions made with Turkish lira loans.’
The announcement has been made in an economic and political atmosphere in which there is public discussion and wide-spread criticism of the administration of the Turkish president for the imposition of low interest rates, which encourage people to take out Turkish lira loans to purchase reserve currencies like the US dollar or the euro instead of making new investments, which in turn worsens the currency crisis in the country.
The BDDK announcement said:
“Our Agency has instructed the institutions under its supervision regarding the utmost control that is required over undue transactions with funds received by individuals or corporations as TL loans.”
Although the banks are expected to monitor and report on transactions by clients, it is not clear on what grounds the BDDK is planning to receive this information and to what end it is intending to use it.