Turkish Banks Seen Benefiting From Rate Hike, Stable Lira
- Stocks gain most in two weeks after emergency meeting
- Lenders will need to work through some short-term pain: Dogan
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Turkey’s banks will likely benefit from Wednesday night’s interest-rate increase, though there will be some pain as well. That’s the assessment of some analysts after the central bank’s emergency move to halt a run on the lira.
While there will be a short-term hit to funding costs and lending margins, banks will be helped as the move stems panic in financial markets, according to Cagdas Dogan, a banking analyst at Istanbul-based BGC Partners Inc. For lenders like Turkiye Garanti Bankasi AS, a stable Turkish currency would also ease the burden on local borrowers with dollar-denominated debts.