Non-performing loan ratios in Turkey are tipped to rise sharply as the effects of currency depreciation and rising interest rates feed through to the real economy.
According to official figures, bad debts accounted for just 3% of outstanding loans in the Turkish banking sector at the end of August, but analysts say the real number could already be much higher.
“The solvency of Turkish banks will be weaker than reported figures,” Moody’s said in a ratings note published on August 28.
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