New banking regulations caused a drop in Turkish equities. The Turkish central bank had discouraged too much use of retail credit cards. The new regulation also promoted commercial loans. Among the worst performers on Monday's morning trading on the Istanbul Stock Exchange were five banks. Forty-one percent of the total market capitalization in the Turkish economy comes from banks. The published measures caused the main Istanbul share index to drop 1.74%. It underperformed the emerging markets index, of which also fell 1.17%. Ten-year Turkish bonds, meanwhile, yielded an increase of 9.31%, closing at 9.25% last week.
Cihan Saraoglu from Ekspres Invest told Reuters, "Recent regulations came right after the government's announcements that credit cards should be used less and SME loan rates should be lower." He also added the shorter reaction times between government announcements and regulators' actions. "We are expecting further regulation on fees, which may come pretty soon," he added.
Investors are also looking forward to Tuesday's meeting of the central. Reuters conducted a poll. pf which fifteen economists expect that the bank will maintain its tight monetary policies. Only two economists expect an overnight rise of its lending rate by 50 basis points.
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