Turkey’s state-run Emlak Bank was revived against interest rate lobby - minister
Turkey’s state-run Emlak Bank was reopened in March as a response to speculators and the interest rate lobby which aim to undermine Turkish economy, the Minister of Environment and Urbanisation said on Friday, HT Bloomberg reported.
The Turkish government revived Emlak Bank, infamous for its role in Turkey’s crisis-hit decade of the 1990s, as an Islamic lender to finance real estate projects. Turkey was forced to close the bank in 2001 as part of pledges made to the International Monetary Fund as Emlak Bank and other state-run lenders had run up losses totalling about $20 billion.
“Emlak Bank is not an ordinary bank. It is also a bank that serves as a trench,” minister Murat Kurum said during an iftar meal with the bank’s employees in Istanbul.
“It is an institution established as a response to those engaging in economic speculations to harm this country, to manipulators, to dollar speculators, and to the interest lobby,” he said, adding that Turkey would counter those who want to harm the country by coups, economic wars, and other methods.
Turkish Treasury and Finance Minister Berat Albayrak, announced Emlak Bank’s return in August, saying it would constitute part of a new economic model following a currency crisis that peaked as a result of a diplomatic row with Washington over the almost two-year detention of an American priest. Turkish President Recep Tayyip Erdoğan the same month described the currency crisis in the country as part of an economic war and said Turkey wouldn’t lose it.
The construction sector, which has helped lead economic growth in Turkey through massive infrastructure projects and a housing boom, has been hit hard after the currency crisis, which caused a surge in interest rates on mortgages and inflation.
The government has cut taxes on home purchases and offered cheap lending via state-run banks to help spur a revival in the industry and reduce stocks of new homes lying empty across Turkey’s major cities.