Posted on 18 December 2009
This has been a big week for the Turkish economy, and to a certain extent, for the property market as well.
Firstly the Central Bank kept the key interest rates unchanged for the first time since October 2008; with the overnight borrowing rate at 6.5% for the overnight rate, and the lending rate at 9%. This undoubtedly pleased the markets but had surprisingly little effect on the Lira’s exchange rate – possibly because of positive data in other markets.
This will undoubtedly lead to increased foreign demand for property, as people now see that they are running out of time to secure cheap financing on Turkish property. Many foreigners are able to pay large deposits on Turkish properties, leaving them needing only a little finance, which they can pay off quickly. Those who have been waiting to see how low the rate would go, will now be acting before rates possibly start going back up again in the new year.
Secondly the World Bank announced that small and medium sized enterprises in Turkey would benefit from an additional $250million into the coughers of their access to finance program.
“Small and medium enterprises are an engine of the Turkish economy. Continued access to finance for them is crucial for growth and jobs,” said Ulrich Zachau, Country Director for Turkey. “This second additional loan provides more crucial financing for small and medium enterprises, just when they most need it, as Turkey begins to emerge from the impact of the global economic crisis.”
That is indeed particularly good news for Turkey, which as Zachau rightly says is very much driven by SME’s. After the global financial crisis, which was arguably caused by the greed of the larger corporations within economies, organisations like the World Bank are keen to rebuild our economies on the more stable base of diversified industries and SME’s.
The other stories that have circulated this week tell us that consumer confidence has dropped 2.59% in November, and that unemployment has stabilised at 13.4%.