Central bank: Effects of Europe's financial problems on Turkey limited.

By bne IntelliNews May 27, 2010
The central bank unveiled its biannual financial stability report on May 26 where it says the effects of Europe's financial problems on Turkey has been rather limited so far but warns that if problems spread this will curtail global economic recovery and consequently Turkey will be affected. The bank also asserts that industrial production data show that a double-digit GDP growth is likely in the first quarter however growth performance will be below pre-crisis level until Q3. Household borrowing started to increase after the first quarter of 2009 but household debt is still low compared to many countries while interest and foreign exchange risks are limited, the report furthers. As for the banking sector, the monetary authority says that the improvement in asset quality will continue to have positive impact on profits while the capital adequacy ratio may fall in 2010 as loans extended by banks increase. The central bank notes that the capital adequacy ratio is currently well above the target ratio 12%.

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