Roundup: Türkiye announces debt restructuring program to ease burden on consumers

ISTANBUL, Sept. 27 (Xinhua) — Türkiye announced Friday a decision to allow citizens to restructure their credit card debts with terms of up to 60 months, aiming to ease the financial burden on those awash in debts amid high inflation.
According to a statement published in the Official Gazette, the central bank, in a coordinated move, limited the maximum interest rate for restructuring individual credit card debts to 3.11 percent, the reference interest rate.
Meanwhile, the decision stipulates that the credit limit on the relevant bank’s credit cards cannot be increased until cardholders pay at least half their restructured debts.
The central bank stated on its website that the debt restructuring program is designed for individuals with overdue credit card payments, ensuring that those already in debt are minimally affected by tightening policies.
Murat Tufan, an analyst with the EkoTurk broadcaster, considers that the program could contribute to mitigating the pressures of inflation and high-cost living on consumers, allowing them to manage their debts more effectively in this challenging economic environment.
“I think Türkiye has achieved a very important success regarding inflation, but we are still very far from declaring victory,” Tufan told Xinhua, noting that the country may need at least two more years to achieve disinflation goals.
However, the first public reaction to the decision was cautious.
Emine Taskin, a mother of two, stressed the importance of limiting non-essential spending amid the rising living costs. “I hope people won’t overspend after hearing about the 60-month debt restructuring,” she said.
Türkiye has long been grappling with rising inflation and one of the worst cost-of-living crises in its history, forcing Treasury and Finance Minister Mehmet Simsek and his team to implement tight monetary policies to curb the runaway inflation.
As part of the disinflation efforts, the central bank raised its key interest rate from 8.5 percent to 50 percent since June 2023. In September, it kept its interest rate unchanged at 50 percent for a sixth straight month. Türkiye’s annual inflation rate moderated to 51.97 percent in August, marking its lowest level in a year. ■