The Central Bank of Northern Cyprus lowered interest rates on deposits and loans

The Central Bank of the Turkish Republic of Northern Cyprus (CB TRNC) announced a further reduction in interest rates on transactions in Turkish lira. The decision affected both personal deposits and credit instruments used by businesses.

First of all, the changes concerned deposit rates. Previously, banks offered 38% per year on Turkish lira deposits, but now the maximum rate has been reduced to 36%. For depositors, this means that returns on money held in deposits will decrease. This is already the second reduction in recent months: at the end of July, the rate was lowered from 43% to 38%.

The adjustments also affected credit instruments. The rate on advances (short-term loans secured in foreign currency) was reduced from 46% to 43.5%. For companies operating in key economic sectors — industry, export, tourism, education, and agriculture — the bill discount rate was reduced from 39.5% to 38%. For small entrepreneurs, the conditions became even more favorable: the rate on their bills decreased from 37.5% to 36%.

The new rules came into effect on September 18. Economists note that such steps by the Central Bank directly influence the policies of commercial banks. In the near future, a revision of loan and deposit conditions is expected, affecting both businesses and the public.

It should be noted that changes in Northern Cyprus follow the decisions of the Central Bank of Turkey. On September 11, it reduced the key rate from 43% to 40.5%. Thus, the region is seeing a general trend toward cheaper borrowing and a relaxation of monetary policy.