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By Ezgi Erkoyun
ISTANBUL, June 13 (Reuters) - Turkey’s banking watchdog has eased payment regulations for credit cards, raising the maximum number of instalments and cutting repayment levels as it looks to support domestic consumption in a struggling economy.
The BDDK watchdog cut the minimum of an oustanding card balance payable each month to avoid late payments fees to 30% on all cards, from up to 40%, according to statement in Thursday’s Official Gazette.
The BDDK said late on Wednesday it was increasing maximum instalment to 18 months from 12 for some purchases, including white goods and furniture.
“It seems that the government wants to speed up efforts to recover economic activity (so as) not to extend contraction in GDP to the second half of the year,” Oyak Yatirim said in a note to clients after the changes.
The value of domestic credit card transactions rose 19% year-on-year to 189.5 billion lira ($32.6 billion) in the first quarter, according to Interbank Card Centre (BKM) data.
Over the same period the economy shrank 2.6% year-on-year, after the lira last year shed some 30 percent of its value against the dollar, crimping consumners’ purchasing power.
Ankara introduced a temporary cut in sales tax on certain consumer goods as import costs rose after the lira’s slide.
Shares in some Turkish consumer goods companies rose on Thursday. White goods manufacturer Vestel Beyaz jumped 5.27 percent and electronic goods maker Vestel rose 1.5 percent.
The main share index was down 0.92 percent.
In another effort to boost the economy, Turkish banks will offer companies a total of 25 billion lira ($4.31 billion) under a Treasury-backed loan package, the banking association said on Wednesday.
$1 = 5.8183 liras Reporting by Ezgi Erkoyun and Ebru Tuncay Editing by Daren Butler and John Stonestreet